Rent vs Buy Calculator
Compare the long-term financial difference between renting a home and buying one.
How This Rent vs Buy Calculator Helps You
Renting and buying both have advantages, but the financial difference can be huge. This calculator compares the total rent you would pay over a chosen period versus the total cost of buying a home, including EMI payments and down payment.
It uses standard loan EMI formulas along with yearly rent escalation to give you a realistic comparison. This helps you decide which option is financially better based on your income, goals, and stability.
All calculations happen instantly inside your browser. No data is stored or shared.
Understanding Each Input and Output in the Rent vs Buy Calculator
To help you make a confident decision, here is a simple breakdown of what each input means and how the calculator uses them. This section also explains the meaning of every result shown after calculation.
Inputs Explained
- Monthly Rent:This is the amount you currently pay or expect to pay for renting a home every month. The calculator uses this as the base rent amount for the first year.
- Home Purchase Price:The total price of the property you want to buy. This includes the market value of the house before down payment or loan.
- Down Payment:This is the amount you pay upfront while buying a house. A higher down payment reduces the loan amount and lowers monthly EMI.
- Loan Interest Rate:The yearly interest rate charged by the lender on your home loan. The EMI calculation uses this rate to determine your repayment cost.
- Loan Tenure (Years):The number of years you plan to repay the loan. A longer tenure means smaller EMI but more total interest.
- Annual Rent Increase Percentage:Most rental agreements increase rent every year. This value helps estimate how much your rent will grow over time. A typical rent increase is 5 percent.
Outputs Explained
- Monthly EMI:The fixed payment you make every month if you choose to buy the house. It includes both principal and interest. EMI is calculated using the standard loan formula.
- Total Rent Paid:The total amount you would spend on rent during the selected period, including yearly increases. This helps estimate the long term cost of renting.
- Total Buying Cost:This includes your entire EMI payments over the tenure plus your down payment. It shows the true cost of owning the home.
- Which Option Is Cheaper:The calculator compares renting versus buying and highlights which choice costs less financially based on your inputs.
By understanding what each value means, you can make a clearer decision based on your budget, long term plans, and financial goals.
Frequently Asked Questions
Is renting always cheaper than buying?
Not always. It depends on interest rates, rent growth, home prices, and your stay duration.
What interest rate is used?
The tool uses your entered loan interest rate to calculate the EMI.
Does rent always increase every year?
Typically yes. Most landlords increase rent by 3 to 10 percent annually.
Is my data stored?
No. Everything is calculated locally on your device.