A fair comparison
The question isn't "rent is wasted money": a home loan's interest, stamp duty and maintenance aren't recovered either. The calculator compares two households that spend the same each month:
- The buyer pays the down payment, stamp duty and registration, the EMIs and maintenance, and owns the home (worth more each year if prices rise) less the loan still owed.
- The renter pays rent and invests what the buyer spent upfront, plus, each month, whatever owning costs more than renting. When rent costs more, the buyer invests the difference instead.
Net worth after each year shows who is ahead, and the break-even year is when buying catches up. In most big Indian cities rent is only 2–3% of a home's price a year, much less than the EMI, so renting and investing often stays ahead for many years unless home prices rise fast.
What the numbers leave out
- Brokerage and other costs of selling the home, and of moving between rented homes.
- Tax benefits on home-loan interest and principal in the old tax regime.
- The security of owning, and the freedom to move when renting. These often matter as much as the money.
Check what you could borrow with the home loan eligibility calculator, and how part-payments cut the interest with the prepayment calculator.
Results are estimates for illustration only, not financial advice. Banks and schemes may round, apply TDS or use slightly different day counts — confirm figures with your bank or employer. Written by the Welthr team; last reviewed on .