Rent vs Buy Calculator India 2026 — Should You Rent or Buy?
Compare buying a home vs renting + investing. See the break-even year and which path builds more wealth for your situation.
The Break-Even Year Explained
The break-even year is when your net worth in the "Buy" scenario (property equity minus remaining loan) first exceeds your net worth in the "Rent + Invest" scenario (compounded value of your down payment + monthly surplus invested). In most Indian metros, this happens between year 7 and year 12. The longer you stay, the more buying makes sense.
Hidden Costs of Buying in India
Stamp duty and registration alone cost 5-8% of the property value in most states. Plus, maintenance at 0.5-1% of property value annually, property tax, and society dues. These upfront costs mean you need at least 5-7 years of occupancy just to break even on transaction costs.
Tax Benefits of Home Loans
Under Section 24(b): Up to ₹2 lakh/year deduction on home loan interest. Under Section 80C: Up to ₹1.5 lakh/year deduction on principal repayment. These benefits can significantly reduce your effective housing cost, especially in the 30% tax bracket under the old regime. Use the Marginal Income Tax Rate field above to see how Section 24(b) savings tilt the buy vs rent math in real terms — at 30%, the tax shield alone can pull your break-even year forward by 2-3 years.
Rent vs Buy in Indian Metros
In expensive cities like Mumbai and Bangalore (price-to-rent ratio >30), renting + investing the difference in equity mutual funds often wins for horizons under 10-12 years. In tier-2 cities like Pune, Ahmedabad, and Jaipur (ratio <20), buying becomes more attractive earlier.
Frequently Asked Questions
Is it better to rent or buy a house in India?
It depends on your expected stay duration, property prices in your city, home loan rates, and your investment discipline. If you plan to stay 10+ years and can afford the down payment, buying usually builds more wealth. For shorter stays, renting + investing is often superior.
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