How the comparison works
Buy: you pay the down payment and stamp duty, then the EMI and upkeep. Your wealth is the home's value minus the loan still owed.Rent: you invest the down payment and stamp duty instead, pay rent, and each month invest whatever is left after rent compared with the EMI and upkeep. Your wealth is that investment.Tax benefits on home-loan interest and principal are left out, as are capital gains tax and the cost of moving. The result depends heavily on how fast prices and rents rise, so try a few figures.
Frequently asked questions
What usually decides it?
The ratio of rent to price. When a year's rent is under 3% of the home's price, as in most Indian cities, renting and investing often comes out ahead over 10–15 years; buying wins when prices rise fast or you stay very long.