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Rent vs Buy Calculator

Rent vs Buy Calculator

Would you be richer renting and investing the difference?

₹
%
%
yrs
₹
%
%/yr
%/yr
%
yrs
Home value at horizon
0
before loan payoff & sale tax
Total interest paid
0
over the comparison horizon
24(b)+80C tax saved
0
old tax regime only
Invested corpus if renting
0
down payment + monthly surplus, invested

Buy side: EMI is calculated on the loan amount at your assumed rate; interest is deductible up to ₹2,00,000/year under §24(b) and principal up to ₹1,50,000/year under §80C — both only apply if you're on the old tax regime. Maintenance/property tax is assumed at 1% of current home value per year. At the horizon, the home is treated as notionally sold: sale-side long-term capital gains are taxed at 12.5% above a ₹1,25,000 exemption (Section 54 reinvestment rollover, which can defer this entirely, isn't modeled). Rent side: the down payment plus any month where buying costs more than renting is treated as invested at your assumed return; HRA exemption (a further tax benefit for salaried renters) is not modeled and would tilt the comparison further toward renting. This is a simplified simulation, not financial advice — real outcomes depend on your specific tax situation, loan terms, and how markets actually move.

What to work out next

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Frequently asked questions

What is EMI and how is it calculated?

EMI (Equated Monthly Installment) is the fixed monthly payment that repays a loan over its tenure, made up of principal and interest combined. It's calculated from the loan amount, interest rate, and tenure using a standard amortization formula -- the same one this calculator uses, so you can see the exact monthly figure and how much of each payment goes to interest versus principal.Read more: The Credit Card Minimum Due Is Designed to Keep You Paying Forever

Does prepaying a loan actually save money?

Yes, almost always -- a prepayment reduces the outstanding principal, which reduces the interest charged on every remaining installment. The earlier in the loan you prepay, the more you save, since interest is front-loaded in most amortization schedules. Check for prepayment penalties with your lender first.Read more: The Insurance Hiding Inside Your Car Loan

What's the difference between flat rate and reducing balance interest?

Flat-rate interest is charged on the full original loan amount for the entire tenure, even as you pay it down -- reducing-balance interest is charged only on what's still outstanding, so it falls every month as you repay. A flat rate quoted at the same percentage as a reducing-balance rate is effectively much more expensive; always confirm which method a lender is using.Read more: Rate Hikes Travel First Class, Rate Cuts Walk

Will improving my credit score lower my loan interest rate?

Usually, yes. Lenders price risk into the interest rate they offer, and a higher credit score signals lower risk, which typically qualifies you for better rates. It varies by lender and loan type, but it's one of the few loan-cost factors largely within your control before you apply.Read more: The Credit Card Minimum Due Is Designed to Keep You Paying Forever

Estimates only, not financial advice. See our Disclaimer.