Should you rent or buy? Compare total wealth after a fixed holding period — with break-even year.
Buy wealth = sale proceeds (home − selling cost − mortgage) + invested surplus + buy tax credits. Rent wealth = down payment + closing cost (invested) + refunded deposit + invested surplus, compounded at 7.0%/yr.
A free rent vs buy calculator. Compare the wealth outcome of buying a home versus renting an equivalent property over a fixed holding period. Models down payment, mortgage P&I, property tax, maintenance, home appreciation, selling costs, rent growth and the opportunity cost of investing the down payment. Returns the break-even year and the final wealth gap.
Price-to-rent is the home price divided by one year's rent for the same place. Below 15 is buy-friendly, 15–20 is neutral, above 20 favours renting, above 25 strongly favours renting. Mumbai and Bangalore often exceed 30; many US Sun Belt cities sit between 12 and 18. It's the fastest sanity check before running any detailed calculation.
A quick heuristic: multiply the home price by 5% and divide by 12 — that's the monthly rent break-even. If actual rent for a comparable place is below this number, renting+investing the difference usually wins. The 5% bundles 1% property tax + 1% maintenance + 3% opportunity cost. The calculator surfaces this benchmark next to your actual rent.
Enter your annual tax savings as a flat number under Advanced. India: a 30% bracket buyer can claim up to ₹1.5L (80C, principal) + ₹2L (24(b), interest) = ~₹1.09L in actual tax saved; HRA-eligible renters can claim ~₹30K/yr. United States: most taxpayers no longer itemize, so MID savings are 0; add a number only if you're confident you'll itemize on a high-rate jumbo loan. The default is pre-filled per country.
Both paths start with the same wealth. The renter invests the down payment + the buyer's closing costs up front. Each month, whichever party has the lower outflow invests the surplus at your chosen investment return. At exit the buyer cashes out the home (minus selling costs and any remaining mortgage); the renter has their investment account plus the refunded security deposit. The wealth difference is the verdict.
The earliest year at which the buyer's total wealth (sale proceeds + side investments) catches up to the renter's investment account. Before that year, renting+investing leaves you wealthier; after it, buying does. Most US scenarios break even between year 5 and year 9; Indian metros often 7–12 depending on rates, appreciation and the rent gap.
Closing/stamp duty has its own input. PMI applies if down payment is below 20% in the US — add 0.5–1% to maintenance to approximate it. HOA fees fold into the maintenance %. Loan processing fees are a one-time ~1% — bake into closing costs.
Long-run US home prices roughly track inflation +1% (~3–4% nominal). India residential averages 5–8% in metros, sometimes 10–15% near new metro stations / IT corridors. Use Case-Shiller or Zillow Home Value Index (US) / 99acres or local registrar data (IN) for your area.
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