Rent vs Buy Calculator
See which builds more wealth: buying a home or renting and investing the down payment and monthly savings.
| Year | Buy — Net Cost So Far | Rent — Net Cost So Far |
|---|
How to Use Rent vs Buy Calculator
- Enter the home price and down payment percentage. This determines your loan amount and the upfront cash you commit to the property.
- Provide the loan interest rate, tenure, and current monthly rent. Use the rent for a comparable property in the same area to make the comparison fair.
- Set assumptions for inflation, appreciation and investment returns. The defaults are 5% rent inflation, 5% property appreciation and 12% return on invested savings — all editable.
- Click Compare. The tool calculates the net cost of buying (EMIs + down payment minus property value gain) and renting (rent paid minus value of invested surplus) over your chosen comparison period, and declares which is cheaper.
Benefits of Rent vs Buy Calculator
- Models the opportunity cost of the down payment and the monthly EMI‑rent difference — money that could be invested if you choose to rent.
- Accounts for property appreciation and rent inflation, giving a realistic long‑term comparison rather than a simplistic one‑year snapshot.
- The year‑wise table shows the cumulative position so you can see exactly when buying overtakes renting (if it ever does).
- All inputs are editable, so you can test optimistic, pessimistic and realistic scenarios in seconds.
Frequently Asked Questions
Does the calculator include maintenance and property tax?
Not directly. The model is simplified to focus on the major cash flows: down payment, EMIs, rent and investment returns. You can mentally add 1‑2% of property value annually to the buying cost for a more conservative estimate.
What price‑to‑rent ratio favours renting?
If the annual rent is less than 4‑5% of the property price (ratio above 20‑25), renting and investing the difference often wins financially. The calculator lets you test this with your actual numbers.
Should I base the decision purely on the calculator result?
No, consider emotional factors too — owning a home provides stability and the freedom to modify it, while renting offers flexibility to relocate. The calculator gives the financial picture; your lifestyle needs complete the decision.
Is Rent vs Buy Calculator free and private?
Yes — it is 100% free, needs no sign‑up, and everything runs in your browser; your data never leaves your device.
Disclaimer: Simplified model. Maintenance, property tax, brokerage not included. For illustration only.