The case for buying usually gets made by comparing an EMI to a rent, which is not a comparison at all — it ignores the down payment that stopped being invested, the interest that is not building equity, and the 6–8% of the purchase price that disappears at registration. This runs both paths properly and shows the gap, whichever way it falls.
Be honest here. This is the assumption that decides the answer.
Of property value, each year. 1% is typical.
This calculator needs JavaScript. The full worked model, with every assumption stated, is in the rent versus buy post on the blog.
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Buying assumes stamp duty and registration at 7% of the price, paid upfront and never recovered. The buyer’s wealth is the property value less the outstanding loan. The renter invests the down payment, the transaction costs, and every month the EMI plus maintenance exceeds rent — and stops investing, without borrowing, in any month where rent exceeds the EMI. No tax relief on home loan interest is modelled, which favours renting; no capital gains tax on the investment portfolio is modelled, which favours renting too. Brokerage on a property sale is excluded.
“My EMI is ₹38,000 and rent for the same flat is ₹28,000, so buying costs me ₹10,000 more a month” leaves out most of the cost. The down payment — ₹20 lakh on a ₹1 crore flat — stopped compounding the day it was paid. Stamp duty and registration took another 6–8% and returned nothing. Maintenance, property tax and repairs run around 1% of value a year, forever. And in the early years of a 20-year loan, the large majority of each EMI is interest, which builds no equity at all.
Set against that, the buyer owns an appreciating asset and eventually owns it outright, while the renter faces a rent that rises every year and owns nothing at the end. Both sides are real. The only way to know which wins is to run both paths over the same horizon with the same money, which is what this does.
Property appreciation and investment return. Everything else — loan rate, maintenance, rent escalation — matters at the margin. Those two dominate, and both are assumptions rather than facts. If you assume Indian residential property compounds at 5% and equity at 11%, renting and investing usually wins over 20 years in a metro where rental yields are low. Assume property at 8% and the answer flips.
Rather than assert which way it usually goes, the calculator solves for the breakeven appreciation rate — the rate at which the two paths finish level on your inputs. That reframes the question usefully: instead of asking “should I buy?” you are asking “do I believe this flat will appreciate faster than X?”, which is a question you can actually reason about using what comparable flats in the building have done.
The rental yield in your city does most of the remaining work. At a 2% gross yield renting is very hard to beat; at 4% buying gets much easier to justify. The full worked model goes through a ₹1 crore flat line by line, and the rental yield calculator checks that one figure on its own if you want the quick version first.
Security of tenure is worth something real and this model cannot value it. Neither can it price the freedom to move for a better job without breaking a lease and losing a deposit, which points the other way. A house you own cannot be sold in a week when you need the money; a mutual fund portfolio can. And the forced-saving discipline of an EMI genuinely helps some people build wealth they otherwise would not have.
None of that is a reason to skip the arithmetic. It is a reason to know what the arithmetic says before deciding to override it, which is a different thing from not knowing.
It depends almost entirely on rental yield in your city and on what you assume for property appreciation versus investment returns. In metros where gross rental yields are around 2–3%, renting and investing the difference has historically been hard to beat over 20 years. Where yields are higher, buying gets easier to justify.
Stamp duty and registration at 6–8% of the price, which is never recovered; maintenance, property tax and repairs at roughly 1% of value annually; and the opportunity cost of the down payment, which is usually the largest omitted item. Interest in the early years of a loan also builds no equity.
Rather than assume one, run the calculator at several. The answer flips somewhere between 5% and 8% for most metro inputs, which tells you the honest conclusion is a range, not a number. Look at what comparable flats in the same building actually sold for over the last decade rather than at asking prices.
It helps the buying case and is not modelled here, which makes this calculator mildly conservative on buying. Under the new tax regime, which most salaried taxpayers now default to, the interest deduction on a self-occupied property is not available — so whether it applies to you depends on which regime you have chosen.
Long enough for appreciation to recover the 6–8% lost at purchase and the interest paid early in the loan. On typical metro assumptions that is upwards of seven to ten years. Below that horizon the transaction costs alone usually settle the question, whatever the appreciation assumption.
TLDR Money tracks property alongside your funds, stocks, EPF and the loan against it — so home equity is a number you can see rather than a feeling. No brokerage, no distribution, no commission on anything you own.
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Calculator and assumptions last reviewed 5 August 2026.
This is an explanation of arithmetic, not advice about your money. TLDR Money is not a registered investment adviser and earns nothing from any product mentioned here. Figures are illustrative; your own numbers, taxes and circumstances will differ.