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Buy Net Worth = Property Value at Horizon - Outstanding Loan
Where Property Value = Initial Price * (1 + Appreciation Rate)^Years, and Outstanding Loan is calculated using standard amortisation.
Rent Net Worth = Investment Corpus from Down Payment Capital
Initial capital = Down Payment amount. This grows at your specified investment return rate over the horizon period.
EMI = P * r * (1 + r)^n / [(1 + r)^n - 1]
Where P = Loan Amount (Property Price - Down Payment), r = Monthly interest rate, n = Tenure in months (20 years = 240 months).
Breakeven = First year where Buy Net Worth > Rent Net Worth
We iterate year by year to find when buying surpasses renting in net worth.
A Buy vs Rent Calculator is a financial planning tool that helps you compare the long-term financial outcomes of buying a property versus renting one. It considers factors like property appreciation, loan interest, rent escalation, and investment returns to determine which option builds more wealth over your chosen time horizon.
The calculator provides estimates based on your inputs and Square Yards market data where available. Accuracy depends on the quality of inputs and assumptions about future trends (appreciation, rent escalation). We recommend using conservative estimates and reviewing the sensitivity analysis to understand how changes in assumptions affect the outcome.
The most impactful inputs are: (1) Property appreciation rate - higher appreciation strongly favors buying, (2) Loan interest rate - higher rates increase buying costs, (3) Investment return rate - higher returns favor renting, (4) Time horizon - longer horizons generally favor buying due to equity buildup, and (5) Rent escalation - higher escalation makes renting more expensive over time.
The breakeven year is when buying becomes financially better than renting. Before this point, the renter's investment corpus exceeds the buyer's net equity. After breakeven, the buyer's equity (property value minus loan) surpasses the renter's accumulated investments. A shorter breakeven period indicates buying is more attractive.
When you select a city, locality, or project, Square Yards automatically fetches: estimated property price (per sq ft), estimated market rent, appreciation trends (when available), and rent escalation trends. Each data point shows its source, timestamp, and granularity. If any data is unavailable, you'll be prompted to enter it manually.
Absolutely. Every auto-filled value from Square Yards data can be overridden. Simply edit any field - the calculator will use your input while showing the original market value for reference. This allows you to model scenarios based on your specific negotiations or expectations.
The simplified model focuses on core financial outcomes: property price, down payment, EMI (principal + interest), property appreciation on the buy side; and rent payments, rent escalation, and investment growth of saved capital on the rent side. The result shows net worth comparison at your chosen horizon.
Yes, this is a key feature. When you rent, the capital that would have gone toward down payment is assumed to be invested. The calculator models this investment growth based on your specified return rate, which forms the 'Rent Net Worth' at the end of your horizon.
If property price or rent data isn't available from Square Yards for your selected location, the calculator will show "Data unavailable" in the Market Data panel and prompt you to enter the values manually. You only need to provide the minimum missing inputs - Property Price and/or Monthly Rent.
Disclaimer: This calculator provides estimates based on your inputs and available market data from Square Yards. Actual outcomes may vary due to market conditions, policy changes, and other factors. This tool is for informational purposes only and should not be considered financial advice. Please consult with qualified financial advisers before making major financial decisions.
