Rent or Buy? The Verdict
Don't rely on emotions. Use this high-IQ calculator to check if buying a house builds wealth or destroys it compared to renting + SIP.
Your Scenario
Wealth Projection (20 Years)
Buying Scenario
- Monthly EMI: ₹0
- Total Interest Paid: ₹0
- Final Property Value: ₹0
Renting Scenario
- Monthly Rent (Start): ₹0
- Monthly SIP (Savings): ₹0
- Final Investment Value: ₹0
The Logic: How this Calculator Works
1. Opportunity Cost (The Magic of SIP)
When you buy a house, you pay a huge down payment (e.g., ₹15 Lakhs). If you rented, you would invest that ₹15 Lakhs in mutual funds. Additionally, your EMI is usually 2x or 3x higher than rent. A smart renter invests this "Monthly Savings" (EMI - Rent) into an SIP. This calculator tracks the growth of that investment.
2. Inflation is Key
Rent isn't constant. We assume rent increases by 5% every year. Property value also appreciates (usually 5-6%). This tool adjusts for both to give a fair comparison after 20 years.
When to Buy?
- ✔ If you plan to stay in the same city for 10+ years.
- ✔ If you value "Emotional Security" over financial returns.
- ✔ If rental yield in your city is very high (>4%).
When to Rent?
- ✔ If you are in early career and may move cities.
- ✔ If EMI is more than 30% of your take-home salary.
- ✔ If you are disciplined enough to SIP the difference.
Common Questions
Does this include Tax Benefits?
This calculator focuses on wealth creation. Under the **New Tax Regime** (Budget 2026), tax benefits on Home Loans (Section 24b) are removed. So, purely financial comparison is more relevant now.
Why is the SIP return set to 12%?
12% is the average long-term return of Nifty 50 Index funds in India over the last 15-20 years. Real estate generally grows at 5-7% (matching inflation) in most cities.