Buy, rent or invest?
See what leaves you richer.

A fair comparison

Both choices start with the same money and get the same amount from your income every month. That monthly amount is whatever the costlier choice needs in that month; the other choice invests what is left over. Rental surpluses and tax savings are invested too. In the prepay comparison, the planned extra monthly amount is set aside in both choices. This is a like-for-like budget for the comparison, not a check of your whole household budget.

The result is what you could keep if you sold the property and redeemed every fund at the end: investments + sale price + refundable rent deposit − loan still owed − selling costs − estimated capital-gains tax. In the prepay comparison the home is the same in both choices, so it is left out: the result is investments minus the loan still owed, which can be negative. Each yearly point on the chart uses the same “as if sold that year” method, without actually selling along the way.

Timing, returns and costs

Loans use a reducing balance: interest each month is the yearly rate ÷ 12 on the amount still owed, and the EMI is paid at the end of the month. For an existing loan, the best input is your current EMI from the lender; the tool then works out the months left from today’s outstanding principal and current rate. You can instead enter the time remaining to estimate the EMI. The original tenure is not needed, because today’s outstanding balance already reflects past repayments. The rate and EMI stay fixed until a prepayment or payoff; the last EMI can be smaller. When you choose to reduce the EMI after a lump-sum prepayment, the current payoff month is kept.

Fund returns use the effective monthly equivalent of the yearly return, (1 + yearly)^(1/12) − 1. The starting money is invested today, and each month’s left-over money is invested at the start of that month. Rent and owner costs rise after every 12 months; the home value grows at the yearly rate you enter. Loan rates stay fixed. A prepayment charge, if entered, comes out of the money available to prepay.

Vacancy is averaged across the year. Owner upkeep and municipal tax are paid even when the home is empty. The tenant’s refundable deposit is paid at the start and returned at the end, without interest or top-ups. In the rental-property comparison, your own living arrangements are the same in both choices and are left out. Landlord deposits, brokerage, moving costs, major renovations and GST are not modelled. Enter only the owner costs you actually bear, leaving out any upkeep already included in the rent.

Indian tax estimates

For a resident individual buying a ready-to-move-in residential home now. The tax regime you choose stays the same throughout, using FY 2026–27 rules. Equity gains and long-term gains on the newly bought property use their own fixed rates. Debt-fund gains, short-term property gains, rental income and deduction savings use the marginal rate you enter, which already includes cess and any surcharge. This is not a full tax return: it assumes enough taxable income and does not work out slab changes, rebates, marginal relief, other properties or other capital gains and losses. A large debt-fund redemption can push you into a higher slab, so the real tax may differ. Each modelled year is a 12-month block from today, not an April–March year. The tool does not choose the better tax regime for your total income.

• A home you live in: in the old regime, eligible interest is deductible up to the limit you enter (at most ₹2,00,000 a year). The new regime gives no deduction for a self-occupied home. Completion and loan-eligibility conditions must be met.
• A home you rent out: rent collected after vacancy is the annual value. Municipal tax paid by the owner is deducted, then the 30% standard deduction and loan interest. Rent is assumed to meet fair-rent rules. Actual upkeep is a cash cost and is not deducted again for tax.
• Rental losses: in the old regime, up to the amount you enter (at most ₹2,00,000) reduces your other income each year; the rest is carried forward for up to eight years and used only against future income from this property. Unused losses have no value at the end. In the new regime, a house-property loss can neither reduce other income nor be carried forward, as the Income Tax Department’s return guidance states.
• Principal repayments (the familiar 80C deduction; section 123 of the Income-tax Act, 2025): old regime only, within the shared ₹1,50,000 yearly limit. Only the unused allowance you enter is counted; the default is zero. Stamp-duty and older deductions are left out. For a new purchase held five years or less, principal benefits are left out, because selling within five years reverses them. Existing-loan comparisons assume you keep the home.
• HRA: optional and old regime only. The exemption is the smallest of the HRA received, rent paid minus 10% of basic salary plus eligible DA, and 50% or 40% of that salary. From 1 April 2026 the 50% cities are Mumbai, Kolkata, Delhi, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad; other places use 40%. Only the tax saved is credited, not the HRA itself.
• Selling the property: gains on a property held more than 24 months are taxed at 12.5% plus 4% cess and the capital-gains surcharge you choose, without indexation. Shorter holdings use your marginal rate. Stamp duty and buying charges are part of the cost; interiors and loan costs are not. No reinvestment exemption, stamp-value substitution or capital-loss benefit is assumed.
• Equity-oriented funds: each month’s investment is aged separately. Gains held more than 12 months are taxed at 12.5%; 12 months or less at 20%. These rates apply in both regimes. 4% cess and your capital-gains surcharge are added: without surcharge the effective rates are 13% and 20.8%. The unused ₹1,25,000 long-term exemption you enter is applied once, at the final redemption, not every year.
• Specified debt funds bought now: gains on units bought on or after 1 April 2023 are taxed at your slab rate however long you hold them, with no indexation or equity exemption. This category covers funds with more than 65% in debt and money-market instruments, and funds of funds with at least 65% in such funds. It does not cover every hybrid, gold or international fund.
• Fund returns: growth option, no payouts. Enter returns after fund expenses but before your tax. Exit loads, STT and stamp duty on purchase are left out. The return, price-growth, rent-growth and buying-cost defaults are editable examples, not market quotes.

Read the original guidance

1. Income Tax Department: house-property interest limits, loss set-off and carry-forward in both regimes
2. Income Tax Department: rental income and the 30% deduction
3. Income Tax Department: HRA and self-occupied interest under the new regime
4. Economic Times, 20 March 2026: HRA 50% category extended to eight cities from 1 April 2026
5. AMFI: mutual fund capital-gains rates and holding periods
6. Income Tax Department: specified debt-fund definition
7. Income Tax Department: set-off and carry-forward of losses; Income-tax Act, 2025 FAQs
8. Economic Times, Budget 2026: specified debt-fund gains stay taxed at slab rates

Rules checked on 14 October 2026. Some official pages still use 1961 Act section numbers; check the matching provisions of the Income-tax Act, 2025 when filing. Rates and laws may change.

What “better” means here

The headline names the choice with the higher projected value under your inputs. A gap within 1% of the larger value (or ₹1,000, whichever is more) is called too close to call. The “different return” check changes only the fund return, by 3 percentage points each way; it is not a probability or forecast. The tie-point search varies only the fund return between −10% and 30%. Owning a home, flexibility, investing discipline, comfort with debt and access to cash remain personal decisions.