Rent vs Buy Calculator

How the comparison works

The buy side adds up everything ownership actually costs you over the years you hold: the down payment, the upfront costs (stamp duty, registration and legal, set as a percentage you can change), every EMI, and the yearly costs of maintenance and property tax. From that it subtracts the equity you would walk away with on a sale, the property's grown value minus the loan you still owe at that point. The rent side simply compounds your monthly rent upward each year. Whichever total is lower for your holding period is the cheaper choice, and the verdict reports the year buying pulls ahead.

Two details make this more honest than a quick rule of thumb. It uses the amortising loan balance, so the equity credited at sale is what you would clear the mortgage with, not the original loan amount. And it counts the real cash costs of owning, the stamp duty you pay on day one and the upkeep you pay every year, which a simple price-minus-loan shortcut quietly leaves out.

What "break-even" actually means here

Break-even is the first year at which the net cost of having bought falls to or below the total you would have paid in rent over the same period. Before that year, renting has cost you less; after it, buying has. The single most important input is the one people guess at, years you'll hold, because buying front-loads its costs and earns them back slowly through appreciation and loan paydown.

Break-even by city: worked examples

Using a mid-market 2BHK in each of our cities, on one consistent set of assumptions, here is roughly when buying overtakes renting. You can reproduce any row by typing its price and rent into the calculator above.

Illustrative 2BHK examples drawn from our city guides. Assumes 20% down, an 8.75% loan over 20 years, 6% annual appreciation, 5% rent rises, 1% yearly costs, and upfront costs set to the state stamp duty (about 6% in Gujarat, about 10% in Kerala). Verified July 2026; reproduce any row in the calculator above.

The pattern is consistent. Across Gujarat's tier-2 cities, buying tends to overtake renting in about three years on these assumptions, while Kerala's far higher stamp duty pushes break-even out to around five. Notice that low-priced Rajkot reaches break-even just as fast as pricier Ahmedabad: what drives the year is the ratio of rent to price and the growth rate, not the absolute price. For the local price bands behind these examples, see the city guides, and for an exact duty figure to put in the upfront-costs box, the stamp duty calculator.

Appreciation is the swing factor

Change one number, the rate at which the property appreciates, and the answer moves more than for any other input. Holding the Surat example above (₹75 lakh, ₹22,000 rent) and varying only the growth rate:

Surat example, varying only the appreciation rate; all other inputs as above. Verified July 2026.

This is why the widely quoted "buying wins after six to ten years" rule is really a statement about slow-growth markets. In a market compounding at 3% a year that rule holds; at 6%, leverage makes buying win far sooner, because you put down a fraction of the price but capture the appreciation on the whole asset. Since nobody can promise a growth rate, treat the low-growth row as your cautious case.

Reading the result like an NRI

For a resident, this is a spreadsheet question. For an NRI there are two extra forces. First, the rent you are comparing against is often not your own, many NRIs buy while parents or tenants occupy, so the real comparison becomes buy-now versus invest-abroad-and-buy-later. Second, at tier-2 prices the break-even lands earlier than in the metros: a ₹75 lakh flat in Surat renting at ₹22,000 breaks even years sooner than a ₹2.5 crore flat in Mumbai renting at ₹60,000. That is a large part of why NRI money has drifted to the cities in our city guides.

What the calculator still leaves out

Three things, all of which nudge the honest answer slightly toward renting. It ignores the tax on your rental income and on the eventual capital gain (see the capital gains guide and TDS on a sale); it ignores brokerage on the purchase and any resale; and it ignores the opportunity cost of your down payment, the return it might have earned if you had invested it instead of locking it into a flat. If buying wins for your numbers, the next question is what the loan really costs in your currency, so run it through the NRI EMI calculator.