Is it better to rent or buy a home in India?
Buying feels safe, but a home is also an investment with a cost: the down payment, stamp duty, interest, maintenance and property tax all compete with simply investing that money. Because rent yields in India are low (often 2–3% of the home value per year), renting and investing the difference can beat buying over many periods — but only if you actually invest the difference every month.
How this calculator compares them
- Both paths start with the same cash. The buyer spends it on the down payment and fees; the renter invests it.
- Each month the cheaper path invests the gap, so both spend the same total amount.
- At the end we compare net worth: home value (after selling costs) minus the remaining loan plus any investments, versus the renter's investment pot.
What the calculator doesn't capture
- Tax on rental income, if you would let the home out, and the Section 54 exemption on reinvesting gains.
- The emotional value of owning: stability, freedom to renovate, no landlord.
- Big price swings in particular neighbourhoods.
Frequently asked questions
What appreciation should I assume?
Long-run Indian residential appreciation has varied widely by city. 4–7% a year is a prudent range; test several values.
What is break-even?
The first year in which owning leaves you with a higher net worth than renting and investing. A longer break-even means you need to stay put for longer.
Why does renting often win here?
Low rental yields mean rent is cheap relative to EMI + upkeep, so the renter invests a large monthly gap and benefits from compounding.