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Clarowl

Tool 2.4

Rent vs Buy Calculator

Find the exact year buying overtakes renting — hidden costs and tax benefit included, not just EMI vs rent.

Calculated entirely in your browser — nothing you type is sent anywhere.

Buying

Total purchase price of the home

Upfront amount, not financed by the loan

Auto-fills a typical stamp duty + registration rate — edit it if yours differs

One-time cost as % of home price — varies by state and gender/property value

The annual rate your bank quoted you

Also sets how many years this comparison runs for

Renting

What an equivalent home would rent for today

How much rent typically rises each year — most Indian leases step up 5–10%

Assumptions

These drive both sides of the comparison — market-linked figures, not guarantees.

How much the home's value grows per year

What you'd earn investing the difference instead

% of home price, per year

Claim home loan interest tax benefit

Section 24(b), up to ₹2L/year — old tax regime only

Your break-even year will appear here

Fill in the home, rent, and rate assumptions, then calculate to see which option builds more net worth, and when.

Estimates for educational use only — not financial advice, and not from a SEBI-, RBI-, IRDAI-, or AMFI-registered entity. Verify before acting.

How this works

Most rent-vs-buy calculators compare a single point in time — "after 10 years, buying wins." This tool tracks net worth year by year for both paths instead, because rent escalates every year while your EMI stays fixed, so the gap between them keeps changing. A single-year snapshot can miss when — or whether — buying actually gets ahead; this finds the exact crossover.

Buying's net worth is your home equity (value minus remaining loan) minus maintenance paid, plus the Section 24(b) interest tax benefit if you claim it. Renting's net worth is what you'd have if you invested your down payment and stamp duty upfront, then invested the monthly gap between your EMI and your rent every year after — that invested gap is the real opportunity cost of buying, not renting.

Frequently Asked Questions

Why does the break-even year matter more than the total at year X?
A single "value at year 10" comparison can be misleading — buying might be ahead by year 5, then fall behind by year 15 if rent escalation outpaces property appreciation, or the reverse. This tool tracks every year so you see the actual trajectory, not one snapshot.
Where does the stamp duty rate come from?
It auto-fills based on the typical combined stamp duty and registration charge for your selected city — a reasonable starting estimate, not an exact quote. Actual rates vary by exact property value and, in several states including Maharashtra and Delhi, by the buyer's gender. Edit the field if you know your exact rate.
What happens to the comparison after my loan is paid off?
This tool stops at your loan tenure. After payoff, buying's ongoing cost drops to just maintenance and property tax, which usually strengthens the case for owning — this version doesn't model that period, so treat the result as a conservative view of buying's case if your real horizon extends well past your loan tenure.
How does the tax benefit calculation work?
If you claim it, each year's home loan interest (up to ₹2L) is deducted at your income tax slab rate — the standard Section 24(b) benefit, available only under the old tax regime. It lowers buying's effective cost, so leaving it off makes buying look more expensive than it typically is for someone still on the old regime.
What if rent grows faster or slower than I assumed?
The whole comparison is sensitive to this. A higher rent escalation rate makes buying look better, since the renter's real housing cost rises faster; a lower one favors renting. Try a couple of different escalation rates to see how much your break-even year actually depends on it.

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