Rent vs Buy Calculator - Should You Buy or Rent?

Buying makes financial sense if: you plan to stay 7+ years, EMI is less than 1.5x your rent, and property appreciation exceeds inflation. In expensive cities like Mumbai and Delhi, renting is often financially smarter — price-to-rent ratios of 30-40x make buying costly. A ₹1 crore flat with ₹25,000 rent implies a 33x ratio (rent gives 3% yield) vs home loan cost of 8.5%. In Tier-2 cities with 15-20x ratios, buying makes more sense. Use the free Rent vs Buy Calculator on AbacusHand to calculate your exact result instantly.

Rental yield in Indian metros is typically 2-4% of property value. A ₹75 lakh flat may rent for ₹18,000-₹25,000/month, while the EMI at 8.5% for 20 years would be ₹64,800/month — 2.5-3x the rent. However, EMI builds an asset while rent builds no equity. The break-even point is typically 10-15 years when total rent paid approaches total EMI paid, excluding property appreciation. Use the free Rent vs Buy Calculator on AbacusHand to calculate your exact result instantly.

Buying makes financial sense when: (1) You plan to stay 8+ years in the same city, (2) Down payment is available without depleting emergency fund, (3) EMI is below 40% of take-home salary, (4) Price-to-rent ratio is below 20, (5) Property appreciation in the area exceeds 5-6% historically. For a ₹60 lakh property with ₹20,000 rent and 6% property appreciation over 15 years — buying typically builds more wealth than renting and investing the EMI-rent difference. Use the free Rent vs Buy Calculator on AbacusHand to calculate your exact result instantly.

Beyond the property price and home loan EMI, hidden costs include: stamp duty + registration (6-8% of property value = ₹4-5 lakh on ₹60 lakh), brokerage (1-2% = ₹60,000-₹1.2 lakh), GST (5% for under-construction = ₹3 lakh on ₹60 lakh flat), home loan processing fee (₹10,000-₹15,000), annual maintenance charges (₹20,000-₹1 lakh), and property tax (₹5,000-₹30,000/year). These can add 10-15% to the effective cost. Use the free Rent vs Buy Calculator on AbacusHand to calculate your exact result instantly.

Property appreciation varies significantly by location. Metro city tier-1 localities (South Mumbai, South Delhi, Bandra): 8-12% CAGR. Peripheral suburbs and Tier-2 cities: 5-8%. Tier-3 cities: 3-5%. Overall Indian residential property has appreciated at 5-7% CAGR over 20 years (NHB Residex data). This barely beats inflation (6% CPI average) in many cities, which is why financial experts argue that equity mutual funds (12-14% CAGR) may outperform real estate as investment. Use the free Rent vs Buy Calculator on AbacusHand to calculate your exact result instantly.