See which one leaves you wealthier over time — not just cheaper month to month. Compares home equity you'd build against the portfolio you'd grow by renting and investing the difference.
The Property
The Loan
The Rental
Assumptions
Net worth over time
Assumes the rent-vs-EMI cash-flow difference each month is invested at your chosen return rate, and compares net worth (home equity vs. invested portfolio) at the end of the period. A 2% selling cost is deducted from home equity in the final-year figure. This is an illustrative estimate, not financial advice — actual outcomes depend on real market conditions, taxes, and loan terms.
The "buy vs rent" decision is often framed as EMI vs monthly rent, but that misses the bigger picture. Buying locks up your down payment and upfront costs in an illiquid asset that appreciates over time. Renting frees up that same capital to be invested elsewhere. The real comparison is between the equity you'd build in a home and the portfolio you'd build by renting and investing the difference — which is exactly what this calculator models.
The outcome depends heavily on local rent-to-price ratios, how long you plan to stay, your loan interest rate, and the return you can realistically earn on invested capital. In fast-appreciating Indore micro-markets, buying often wins over long holding periods; in high-price, low-rent-yield pockets, renting and investing the difference can outperform, especially over shorter horizons.
The calculator runs a month-by-month simulation of both scenarios over your chosen comparison period, then compares final net worth.
EMI = L × r × (1 + r)^n ÷ ((1 + r)^n − 1) — L: loan amount, r: monthly rate, n: monthsHome Equity(t) = Home Value(t) − Remaining Loan Balance(t)Renter Portfolio(t) = (Down Payment + Buying Costs) invested, plus monthly (Owner Cost − Rent) invested at Investment ReturnFinal Buying Net Worth = Home Equity(final) × (1 − Selling Cost %)Net Worth Difference = Final Buying Net Worth − Final Renter Portfolio
Owner monthly cost = EMI + maintenance/tax on the current home value. Whenever that owner cost exceeds rent, the difference is treated as money the renter saves and invests each month at your chosen investment return rate. Rent itself grows every year at your chosen annual increase.
You plan to stay 7+ years, home appreciation in your locality is strong, rent-to-price ratios are high (renting isn't much cheaper than an EMI), and you can secure a competitive interest rate. Longer holds let equity build and dilute upfront buying costs.
You expect to relocate within a few years, rent is significantly below the equivalent EMI + maintenance, you can consistently earn strong returns on invested capital, or home prices in your target locality are already elevated relative to rents.
The longer you hold, the more upfront buying costs get diluted and the more equity compounds — holding period is usually the single biggest swing factor.
A higher home loan rate raises your EMI and total interest paid, tilting the comparison toward renting, all else equal.
The rate you assume for investing your saved cash flow (equities, mutual funds, etc.) has an outsized effect — be realistic, not optimistic, when entering this.
It depends on how long you plan to stay, the rent-to-price ratio in your target locality, and your loan interest rate. Longer holding periods and strong appreciation typically favour buying; short stays and high property prices relative to rent favour renting.
It's the year in which your home equity first overtakes the renter's invested portfolio value, based on your inputs. Before that year, renting and investing the difference would have left you wealthier.
Yes. You can set an annual maintenance + tax percentage, which is added to the EMI as part of the owner's monthly cost when comparing against rent.
If your owner cost (EMI + maintenance) is lower than rent, the model assumes there's no monthly surplus for the renter to invest — in that scenario, buying tends to come out further ahead in the net-worth comparison.
Use a realistic, long-term average for the asset class you'd actually invest in — overly optimistic assumptions will make renting look better than it may turn out to be in practice.
No. This tool provides an illustrative estimate based on the assumptions you enter. Speak with a floor.estate advisor for guidance specific to your situation and locality.
Our advisors can run the numbers against actual listings and rental rates in the Indore localities you're considering — get a free consultation.