Rent vs. Buy Financial Calculator
Compares the total cash flows and costs over a fixed period (e.g., 5, 10, or 15 years).
Inputs (₹)
Assumptions (%)
After 10 Years, You Should:
—
—
Total Estimated Cost Outflow
| Total Cost of Renting: | — |
|---|---|
| Total Cost of Buying: | — |
Please ensure all fields are valid, positive numbers, and the purchase price is realistic.
The True Financial Cost of Housing
The **Rent vs. Buy Calculator** determines the financial optimal choice by converting all associated costs (sunk costs, opportunity costs, and appreciation) to a final dollar amount over a set time period. This comparison goes far beyond just comparing monthly rent to the monthly mortgage payment.
Key Financial Components
- **Renting Cost:** Rent payments inflated over time (sunk cost).
- **Buying Cost:** Mortgage interest, property taxes, maintenance (sunk cost), **minus** home equity built and sale proceeds.
The Decision Rule (FAQ)
How long do I need to stay in a home for buying to win?
Buying is often financially superior only if you plan to stay in the home for at least **5 to 7 years**. This is because the high upfront costs of buying (closing costs, agent fees, etc.) take several years of appreciation and equity build-up to recover. Use the calculator to test different comparison periods.