Rent vs Buy: The Honest Math for Kolkata

How this calculator thinks about rent vs buy

Most rent-vs-buy calculators are broken because they compare monthly rent to monthly EMI — a meaningless comparison, because renting frees up a huge down payment that could be earning market returns. This tool models both paths honestly.

Path A — You keep renting

• You invest the down payment (that you'd have used for a house) in equity mutual funds at your assumed rate
• Each year, your rent goes up by the growth rate you set
• The gap between your assumed EMI and your actual rent (when EMI is higher) is also invested
• Your final "wealth" = the investment corpus at the end of your horizon

Path B — You buy the property

• You pay the down payment upfront and take a home loan for the rest
• Property appreciates at your assumed rate each year
• You claim Section 24 (interest up to ₹2L p.a.) and 80C (principal up to ₹1.5L p.a.) tax benefits — approximated at 30% slab if you opted in
• Your final "wealth" = current property value minus outstanding loan, plus tax-saving corpus (also invested at your assumed rate)

What the break-even year means

The break-even year is the point at which the buying path's net wealth overtakes the renting path's. Before this year, renting + investing gives you more money at the end. After it, buying does. Short-term (under 5–7 years) renting almost always wins because of stamp duty, GST, and loan interest front-loading. Long-term (10+ years) buying almost always wins because rent compounds against you while the property compounds for you.

Assumptions worth questioning

• Investment returns of 11% — the historical Indian equity MF average. If you'd realistically park down-payment money in FDs (6–7%), buying wins much earlier.
• Property appreciation of 7% — the Kolkata premium-segment average over the last decade. New Town and Rajarhat have exceeded this; older localities have underperformed.
• Rent growth of 8% — Kolkata is on the aggressive end; conservative estimate is 6%.
• What this doesn't include — annual maintenance (~₹30–50k), property tax, home insurance, and the emotional/lifestyle value of owning your own home. These favour renting on cost but buying on quality of life.