House Affordability (Rent vs Buy) — accurate step-by-step guide

This guide maps directly to the calculator's inputs and result fields so you can run a reliable comparison.

Open the calculator

Open the tool and use the tabs: House Affordability Calculator. Tabs are Buy, Rent and Investments & Tax.

Buy tab — fill these fields

  • House Value (₹) — enter the full on-road cost (including stamp duty and registration). Look for the field labeled "House Value (₹)" on the Buy tab.
  • Down Payment (%) — enter the percent of the on-road price you'll pay upfront (field labeled "Down Payment (%)"). Aim for 20%+ if possible.
  • Interest (% p.a.) — enter the home loan interest rate in the field labeled "Interest (% p.a.)" (use your lender's quote).
  • Tenure (years) — enter loan tenure in years in the field labeled "Tenure (years)".
  • House Appreciation (% p.a.) — enter expected annual property growth in the field labeled "House Appreciation (% p.a.)".
  • Annual costs — fill the labeled fields for Property Tax, Society Maintenance, House Maintenance and Home Insurance, and their growth percentages where available.

Rent tab — fill these fields

  • Monthly Rent (₹) — current rent amount.
  • Annual Rent Increase (%) — expected yearly rent growth.
  • Deposit + Brokerage + Other (₹) — one-time upfront renting costs.
  • Stay Duration (years) — the comparison horizon (same as you expect to hold the home).

Investments & Tax tab — fill these fields

  • SIP ROI (% p.a.) — expected return if you invest monthly savings (EMI − rent) as SIP.
  • Lumpsum ROI (% p.a.) — expected return on lump-sum investments (e.g., down payment if you rent).
  • Tax Slab (%) — your marginal tax percent used to estimate tax benefits.
  • HRA inputs (optional) — basic salary, HRA received and city type for more accurate rent-side tax savings.
  • Home loan deduction limits — enter conservative limits for 80C and 24(b) deductions used by the calculator.

Run a comparison (step-by-step)

  1. Go to the Buy tab and fill the labeled fields: House Value (₹), Down Payment (%), Interest (% p.a.), Tenure (years), House Appreciation (% p.a.) and the annual cost fields.
  2. Go to the Rent tab and fill Monthly Rent (₹), Annual Rent Increase (%), Deposit + Brokerage + Other (₹) and Stay Duration (years).
  3. Open Investments & Tax and fill SIP ROI (% p.a.), Lumpsum ROI (% p.a.), Tax Slab (%) and any HRA values if relevant.
  4. Click the Compare button on the page. Results will appear in the right panel under labels such as Net Gain — Buy, Net Gain — Rent, Advantage, and Verdict.

Where to read results

  • Net Gain — Buy: look for the value labeled Net Gain — Buy to see the estimated final position for buying.
  • Net Gain — Rent: look for the value labeled Net Gain — Rent to see the estimated final position for renting.
  • Advantage: the label Advantage shows which option the tool prefers.
  • Verdict & Tips: plain-language guidance appears under the labels Verdict and Tips.
  • Quick Checks: check the small on-screen rules (Down Payment and Tenure hints) for simple pass/fail indicators.
  • Chart: the comparison chart visualizes net positions over time for both options.

Example walk-through

Try this quick scenario to see how inputs affect results:

  • Buy: House Value=₹10,000,000; Down Payment=20%; Interest=9.075% p.a.; Tenure=20 years; Appreciation=4.3% p.a.
  • Rent: Monthly Rent=₹30,000; Annual Rent Increase=10%; Deposit + Brokerage + Other=₹120,000; Stay Duration=20 years.
  • Invest: SIP ROI=10% p.a.; Lumpsum ROI=10% p.a.; Tax Slab=30%. Click Compare to view Net Gain — Buy vs Net Gain — Rent.

Common pitfalls

  • Assuming high appreciation or returns — test conservative values too.
  • Leaving annual costs empty — maintenance and taxes matter over long horizons.
  • Comparing different horizons — keep the stay duration consistent between Buy and Rent scenarios.

Published: 19 August 2025 • Author: HeroZero