Compare net wealth after buying a property vs renting and investing the down payment. See the break-even year.
Property & loan
Assumptions
After 10 years
Renting & investing builds more wealth
Investing the down payment at 12% gives ₹1.27 Cr vs buying equity of ₹1.16 Cr.
Monthly EMI
₹55,541
vs ₹25,000 rent
Down payment
₹16.0L
20% of price
Total interest
₹69.3L
Over 20 yrs
Break-even
Year 1
When buy outperforms
Net wealth after 10 years
Buy = property value minus remaining loan. Rent = invested down payment plus monthly savings.
| Year | Buy equity | Rent wealth | Property value |
|---|---|---|---|
| Yr 5 | ₹57.0L | ₹57.6L | ₹1.13 Cr |
| Yr 10 | ₹1.16 Cr | ₹1.27 Cr | ₹1.61 Cr |
* Buy equity = property value minus remaining loan. Rent wealth = down payment invested at 12% p.a. plus monthly surplus compounded monthly. Rent escalates at 5%/year. Property appreciates at 7%/year. Does not include stamp duty (~7%), registration charges, or tax implications.
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