Rent vs Buy Calculator (India) — Break-Even & Verdict

No. The classic Indian assumption that “rent is throwing money away” ignores the opportunity cost of locking up your down payment, the EMI-rent gap that could be invested, maintenance, property tax, registration costs (~7% in most states), brokerage on resale (~2%), and the assumption that property always appreciates. In Bengaluru/Mumbai/Pune over 2018-2024, equity SIPs returned ~14% CAGR while many flats appreciated under 5%. The break-even year depends entirely on these assumptions — that's why this calculator runs your numbers and shows where the lines cross.

5-7% nominal CAGR for most Indian metros over 10+ years. Tier-1 cores can be higher in boom cycles, but anomic suburbs are flat or negative for years. Compare to inflation (~6%): real appreciation is often near zero. If you assume property appreciates at 5% and equity at 12%, math will favour renting + investing. If you flip those — 12% property and 5% equity — buying wins. We default to 5% appreciation, 12% equity returns; tune to your view.

Section 24 lets you deduct up to ₹2L of interest paid per year on a self-occupied home loan. Section 80C covers up to ₹1.5L of principal repayment (shared with EPF/PPF/ELSS). For a 30% slab payer, that's up to ~₹1.05L of tax savings per year. Renters get HRA exemption only if their employer pays HRA (and they live in rented accommodation). For salaried employees in metros, HRA can offset a large chunk of the rent; this calculator does NOT bake in tax savings — add ~10-15% to whichever side benefits more if you want a tax-adjusted view.

Selling a house takes 6-18 months in India and costs 2-4% (brokerage + registration on the sale). For someone who switches jobs every 3 years or might move cities, this friction is real and not in any pure financial calculator. Rule of thumb: if you're less than 70% sure you'll be in the same city for 7+ years, lean toward renting. The calculator's break-even year is a useful proxy — if you might leave before break-even, buying loses on every metric, financial and otherwise.

Bengaluru/Pune/Hyderabad saw 20-30% rent jumps in 2022-2023 post-COVID. The default 7% annual rent increase is an average — bump it to 10% to see how aggressive rent inflation flips the math toward buying. Rent control caps in some states (Maharashtra, Tamil Nadu) limit landlord increases for existing tenants but new leases reset to market.

HRA exemption is the lowest of: actual HRA from employer, 50% of basic (40% in non-metros), or rent paid minus 10% of basic. For most salaried Indians in metros, this is meaningful (₹50K-₹1.5L/year). To include it, reduce your effective rent by your annual HRA exemption ÷ 12 in the calculator. Buyers in self-occupied homes don't get HRA. Buyers who rent out the bought home get full HRA but lose the self-occupied 80EE/Section 24 caps.

Break-even is the year at which cumulative buying cost equals cumulative renting cost. Below that year, renting is financially ahead. Above it, buying wins. For a typical 1.5cr Bengaluru flat with 12% equity returns and 5% appreciation, break-even tends to land at year 12-18 — meaning you have to commit to staying that long for buying to pay off. If your time horizon is 10 years, renting is usually cheaper; at 25 years, buying typically wins (and you own a house at the end).