Simulate home purchase versus renting and investing. Adjust appreciation, rent growth, loan terms, and horizon.
Explore tools that pair well with this one—loans, investing, and planning.
This model tracks monthly loan paydown and assumed property appreciation for buyers, and rent increases plus investing the down payment and any monthly surplus for renters. It is a simplified comparison of two wealth paths under your assumptions—not a substitute for cash-flow planning, transaction costs, or personal risk tolerance.
Buyer net worth ≈ property value − outstanding loan. Renter wealth compounds monthly at your assumed return, with rent increasing at your rent growth rate.
Enter property price, down payment, loan rate and tenure, initial rent, appreciation, rent growth, investment return, and horizon. Read the chart and any directional label as illustrative, not prescriptive.
No. This is an educational model. Actual taxes, registration, maintenance, job mobility, and liquidity needs vary widely—use outputs as one input among many.
We compare projected net worth at your horizon: for buying, property value minus outstanding loan; for renting, an invested portfolio from down payment and monthly surplus, compounded at your assumed return.
Not modeled explicitly. You can approximate by adjusting returns or costs outside the tool, or consult a tax professional for Section 24/80C implications.
Very sensitive. Small changes in property appreciation, rent inflation, or investment returns can flip which side looks better—stress-test multiple scenarios.
Use the number of years you care about for the decision (e.g. 7–15 years). Longer horizons amplify compounding on the invested rent path.
Use these notes to stress-test the calculator, understand what drives the result, and choose the right tool for the decision you are making.
The comparison assumes one path for home appreciation, one path for rent growth, one investment return for the renter's surplus, and simplified ownership economics. It does not fully model taxes, selling friction, vacancy risk, or the emotional value of ownership.
If rent starts far below EMI and you consistently invest the monthly surplus, the rent-and-invest path can build wealth faster even when property prices rise. But if rent is already close to ownership cost and appreciation is strong, the buy path can catch up or win.
Treat the recommendation as a scenario summary, not a verdict. The result is especially sensitive to appreciation, rent inflation, holding period, and whether the renter actually invests the difference every month.
This model simplifies a life decision into a financial one. School preferences, family stability, commute, and flexibility are real decision variables that matter even when the spreadsheet appears to favor one side.
“The stock market is a device for transferring money from the impatient to the patient.”
— Warren Buffett
