Important: Home buying has emotional and stability value beyond pure financial returns. This calculator is for financial analysis only — your actual decision should factor in personal circumstances, stability needs, and life goals.
Enter Your Property & Loan Details
Property & Loan
SIP Scenario (if renting & investing)
SIP scenario: Down payment invested as lumpsum + monthly EMI (or EMI amount if EMI > rent, else rent amount) invested as SIP each month.
Property Net Worth
₹1.12 Cr
Property value − loan balance
SIP Corpus
₹1.76 Cr
Down payment + monthly SIP
Full Breakdown
Monthly EMI
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Down Payment
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Total EMIs Paid
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Property Value (end)
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Loan Outstanding (end)
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Total Maintenance Paid
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Monthly SIP Amount
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Total Rent Paid
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Total Invested in SIP
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SIP Gains
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Net Worth Growth — Property Equity vs SIP Corpus
Property Equity (Net Worth)
SIP Corpus
The Honest Math of Buying vs Renting in India
In most major Indian metros, the financial math often favours renting and investing over buying — especially at today's property prices. Here's why:
Price-to-Rent Ratio in Indian Cities
The price-to-rent ratio tells you how many years of rent it would cost to buy the same property. A ratio above 30 strongly favours renting:
- Mumbai: 40–60x (buying is very expensive relative to rent)
- Bangalore: 30–45x
- Delhi NCR: 25–40x
- Pune/Hyderabad: 20–30x
- Tier 2 cities: 12–20x (buying makes more financial sense here)
With a price-to-rent ratio of 40x, you'd pay 40 years of rent to buy the same property. If your investment return exceeds the effective yield on property (rental yield ~2-3% in metros), renting + investing wins financially.
Hidden Costs of Buying Property
- Stamp duty: 5–8% of property value (upfront, non-recoverable)
- Registration charges: 1–2%
- GST: 5% on under-construction properties
- Home loan processing fee: 0.5–1% of loan amount
- Annual property tax: 0.1–0.5% of property value
- Maintenance: ₹2,000–10,000/month depending on society
- Renovation and repairs: ₹1–5 lakh every 5-10 years
- Interest cost on loan: For a ₹64L loan at 8.5% for 20 years, you pay ₹84L in interest alone
When Buying Does Make Sense
- Tier 2/3 cities where property prices are low relative to rents
- You plan to live in the property for 15+ years (transaction costs need time to amortize)
- Emotional stability, security, and building equity in your own home matters to you
- You have a large down payment (40%+) reducing interest burden
- You can claim home loan tax benefits and your marginal tax rate is high
India's real estate reality: Most residential properties in metros have given 4-6% CAGR appreciation over the last decade. After accounting for transaction costs, maintenance, and interest, the effective return is often 2-4% — well below equity mutual fund returns of 12-15% over the same period.
Frequently Asked Questions
Is real estate always a safe investment in India?
Real estate has given 4-6% CAGR in most Indian metros over the last decade, often barely beating inflation. It is illiquid, has high transaction costs, and requires large capital. For pure financial returns, equity mutual funds have significantly outperformed real estate in most cities over 10-20 year periods.
What is a REIT and is it a good alternative?
REITs (Real Estate Investment Trusts) are like mutual funds for commercial real estate. Indian REITs (Embassy, Mindspace, Brookfield) give rental income + capital appreciation starting from ₹300-400 investment. They offer real estate exposure without the illiquidity, maintenance, or large capital requirement of physical property.
What tax benefits are available on home loan?
Section 24(b): Up to ₹2 lakh deduction on home loan interest for self-occupied property. Section 80C: Up to ₹1.5 lakh deduction on principal repayment (combined with other 80C investments). These benefits are only in the old tax regime. For a rental property, the full interest is deductible against rental income.
When does buying a house make financial sense?
Buying makes more financial sense in Tier 2/3 cities where the price-to-rent ratio is low. It also makes sense if you plan to live in the property for 15+ years, giving time to recover transaction costs. Emotional stability and security are also valid non-financial reasons to buy.
What are the risks of under-construction property?
Under-construction properties carry project delay risk (2-5 year delays are common), developer insolvency risk, and quality risk. You pay EMIs but can't live in it during construction. Always buy from RERA-registered projects and established developers.
Can NRIs buy property in India?
Yes — NRIs can buy residential and commercial property (except agricultural land and farmhouses). Purchases can be funded through NRE/NRO accounts. Rental income is taxable in India. Repatriation of sale proceeds has limits under FEMA regulations.
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