How This Calculator Works
This calculator simulates two parallel scenarios over your chosen time horizon:
- Renting: You invest the down payment and monthly savings (EMI minus rent) in mutual funds or other investments
- Buying: You build equity through EMI payments while the property appreciates in value
Buying Costs Included
- EMI payments over the loan tenure
- Stamp duty: 6% (varies by state)
- Registration: 1%
- Annual property tax: 0.5% of property value
- Annual maintenance: 1% of property value
Key Assumptions
- Investment returns are pre-tax (actual returns may be lower post-tax)
- Home appreciation is consistent year-over-year
- Stamp duty rates vary significantly by state (Maharashtra, Karnataka, etc.)
Frequently Asked Questions
When should I buy instead of rent?
Generally, buying makes sense if you plan to stay in the same city for 7-10+ years, have stable income, and local property appreciation exceeds investment returns. Use this calculator to find your specific break-even point.
What is rental yield and why does it matter?
Rental yield is (Annual Rent / Property Value) x 100. If rental yield is below 3%, renting is often financially better as your money grows faster in investments than in property equity.
Should I consider home loan tax benefits?
Yes! Under Section 24, you can claim up to ₹2L deduction on home loan interest annually. Under Section 80C, up to ₹1.5L on principal repayment. These benefits improve the buying scenario.