Lease vs Rent Calculator - Buy or Rent Decision Tool
Compare buying vs renting a property in India. Calculate total cost of ownership, rental savings, opportunity cost, and break-even period to make the right decision.
🏠 Buying
🏢 Renting
About this calculator
Should you buy a home with a loan or rent and invest the difference? The Lease vs Rent Calculator answers with a proper net-wealth comparison. It follows both paths for the number of years you choose and compares what you end up with.
Buying costs a down payment, stamp duty, EMIs and maintenance, and gives you a property that grows in value, less the loan still outstanding. Renting costs a deposit and rent that increases every year, and leaves you free to invest the money you did not spend on the down payment, plus the monthly difference between your EMI and your rent. The calculator invests both at your chosen return and reports the net wealth in each case, so the result depends on the assumptions you can judge: property growth, rent growth and your investment return.
How to use it
- Enter the Property Price, Down Payment (%), Home Loan Rate, Loan Tenure, Stamp Duty (%) and Annual Maintenance.
- Enter the Monthly Rent, Annual Rent Increase and Security Deposit in months.
- Enter the Analysis Period in years, the Property Appreciation rate and the Investment Return if you rent.
- Press Compare Buy vs Rent.
- Look at the net wealth for each path and change one assumption at a time to test how robust the answer is.
Tips and common mistakes
- The answer is most sensitive to property appreciation versus your investment return. Test a pessimistic and an optimistic case.
- A rental yield below about 3% of the property price per year tends to favour renting; above 4% to 5% tends to favour buying.
- Buying has non-financial value: stability, freedom to modify the home and no landlord risk. Renting has flexibility.
- If you will not hold the property for 7 to 10 years, transaction costs usually make buying the weaker choice.
Frequently asked questions
Is it better to buy or rent in India?
It depends on price-to-rent ratio, your time horizon and your discipline in investing the difference. Run the calculator with your own numbers.
Does the calculator include tax benefits?
No. Home-loan tax deductions would improve the case for buying if you can claim them.
Why is the down payment invested in the rent case?
Because the money you do not spend on a down payment can earn a return. Ignoring this is the most common mistake in rent-versus-buy comparisons.
What investment return should I assume?
Use a return you are confident of after tax. Many people use 8% to 10% for equity-heavy portfolios over long periods.
How is stamp duty treated?
It is added to the upfront cost of buying and is not recovered, so it reduces the buying path's wealth.
Why does the monthly difference matter?
If the EMI plus maintenance is higher than rent, the renter invests the gap each month. If the rent is higher, the renter draws on the corpus.