Buy vs rent in India: beyond EMI vs rent
Most buy-vs-rent calculators stop at one comparison: your EMI against your rent. That misses what actually separates the two paths over a career. A house and a Nifty index fund are both just assets — the real question is which one, given what it costs you every month and how many years you have left until retirement, leaves you with more net worth. That is what this calculator projects, year by year, to your retirement age — not just to the day the loan closes.
The price-to-rent ratio matters more than the EMI
A property's price divided by its annual rent — the P/R ratio — is a better starting signal than the EMI alone. Below 20, the numbers usually favour buying: the property is cheap relative to what it would cost to rent, so equity builds faster than a rented alternative's invested surplus could catch up. Above 25, renting and investing the difference tends to win over the long run, because the price has outrun what the property can be rented for. Bangalore currently runs a P/R band of roughly 22-26 — growing fast but already stretched — while Mumbai sits much higher at 33-38, historically stable but expensive on this measure. Between 20 and 25 either can work; it comes down to how long you plan to stay and what your invested surplus actually earns.
Tax benefits: old regime vs new regime
Under the old tax regime, a home loan still carries real deductions — up to ₹1.5 lakh/year on principal repayment (Section 80C) and up to ₹2 lakh/year on interest (Section 24(b)). The new regime, default since FY 2023-24, drops both. That difference alone can be worth several lakh rupees across a 20-year loan, so it is worth checking which regime you are actually on before comparing the two paths — the Tax Benefits tab above lets you toggle it and see the wealth projection change with it.
Why retirement wealth, not just monthly cost
Age and salary growth change the answer more than most calculators admit. A 28-year-old with a fast-growing salary has three decades of compounding ahead — renting a high-P/R city and investing aggressively for a few years, then buying once the ratio improves, often outperforms buying immediately. Someone in their mid-40s has far less runway for a fresh 20-year loan to pay off before retirement, which tilts the calculus differently even at the same P/R ratio. That is why this calculator asks for your age and retirement age at all, rather than treating the decision as a pure EMI-vs-rent arithmetic problem.
Related calculators: PPF + EPF Calculator for the retirement side of this comparison, FD + RD Calculator for a lower-risk alternative to the Nifty return assumed here, and the In-Hand Salary Calculator to get an accurate take-home figure to plug in above.