Why does this calculator say renting might win?
Most calculators ignore the opportunity cost of the down payment — if you invest ₹20 lakh in a Nifty index fund at 12% instead of using it as down payment, it grows significantly. Combined with investing the monthly EMI-rent gap, renting often builds more wealth, especially in metros with high property prices and low rental yields.
What is the "rent gap" and why does it matter?
The rent gap is the difference between your monthly EMI and monthly rent. If your EMI is ₹50,000 but equivalent rent is ₹20,000, you have a ₹30,000/month gap. If you invest this gap in an index fund instead of paying the EMI, it compounds dramatically over 10–20 years — often exceeding the property appreciation.
Doesn't buying build equity?
Yes, but only slowly. In a 20-year home loan, the first 5–7 years of EMI is mostly interest — not equity. You build meaningful equity only in the later years. Meanwhile, your down payment invested in index funds would have compounded continuously from day one.
What about stamp duty and registration costs?
Stamp duty in India is 4–8% of property value — paid upfront, immediately lost. On an ₹80 lakh property in a metro, that's ₹5–6 lakh gone on day one. Property appreciation needs several years just to recover this cost before you're truly "ahead."
When does buying clearly make sense?
Buying makes clear sense when: (1) you plan to stay 15+ years, (2) property appreciation in your area is high (8%+), (3) rental yields are high (property is cheap relative to rent), (4) you value stability and can't be evicted, or (5) you want the asset for family inheritance purposes.
Is this calculator biased toward renting?
No — it's designed to be honest in both directions. It includes full property appreciation, loan tax benefits, and equity buildup for buying. And for renting, it includes rising rent costs over years. The goal is to show the real math without agenda, so you can make an informed decision.
What investment return should I use?
The Nifty 50 has delivered approximately 12–14% CAGR over 20+ years. For conservative estimates, use 10–11%. For aggressive, use 13–14%. The default of 12% is a reasonable middle ground. Even at 10%, renting + investing often beats buying in high-priced metros.
What about the emotional value of owning a home?
This calculator measures only financial outcomes. Homeownership has real non-financial value — stability, freedom to renovate, no landlord, generational asset. These are valid reasons to buy. The point of this tool is to make sure you know the financial trade-off you're accepting when you choose to buy for emotional reasons.