Why Your Rent vs Buy Numbers Changed: One Reading for Every Rate
If you ran a calculator here in August and run the same inputs today, several of the answers are smaller. The inputs mean something slightly different now, and the change is worth spelling out rather than letting you discover it.
What a typed rate used to mean
The rent vs buy and property investment calculators ask for annual growth rates: the return you expect on your investments, how fast you expect the property to appreciate, and how fast maintenance costs rise. Until 20 September these engines took each of those, divided it by twelve, and compounded the result every month.
That is not what the number on the page says. Divide 12% by twelve and you get 1% a month, and 1% compounded twelve times is 12.68% a year. A typed 5% appreciation grew at 5.12%. Nobody who types 12 means 12.68, and over a thirty-year comparison the gap between the two compounds into real money.
Each of those rates now reads as a compound annual growth rate, which is how a fund return and a property price rise are quoted to you in the first place. Type 12 and the model grows the money at 12% a year.
Why the loan interest rate did not change
One rate was left exactly as it was, and the exception is deliberate rather than an oversight. Indian lenders quote a nominal annual rate charged monthly, and they compute your EMI from rate divided by twelve. That is what the bank does to your money every month, so it is what the EMI schedule here keeps doing.
What you are contracted to pay and what you hope to earn are quoted differently in the world, and the calculators now follow the world on both rather than forcing one convention onto everything. The practical effect is that your EMI, your total interest, and your amortisation schedule are unchanged from before.
How far the numbers moved
On the scenario the rent vs buy calculator opens with, renting still finishes ahead, but by ₹1,27,76,233 rather than ₹1,51,11,293. The appreciation break-even, the growth rate at which buying catches up, falls from 7.656% to 7.503%, so buying now needs less appreciation to win than the old arithmetic implied. These figures include both the rate change and the month-end contribution correction described below.
That second figure is the one worth sitting with. Correcting an inflated return rate moved the answer in favour of buying, not renting, because the renter's portfolio was the side collecting most of the excess compounding.
Across the twelve reference scenarios the rent vs buy engine is tested against, the magnitudes all moved and not one verdict changed. That does not establish what happens on your own inputs: rerun your comparison, especially if the two paths were close. The calculator reports the margin and the break-even alongside the verdict so you can see how much room separates them.
Three other corrections shipped at the same time
- Contributions now land at month end. The renter's investments used to be added at the start of the month and then grown, which handed every contribution a free month of compounding the owner never got. The opening balance now earns the month's return and the contribution lands after it, on the same basis as an EMI.
- The break-even search looks for more than one crossing. A cash-flow comparison can change hands twice over a long horizon. The solver scans the whole permitted range, reports every crossing it finds, and measures the margin from the nearest one, instead of assuming a single tipping point exists.
- Both ledgers count cash the same way. "Cash paid towards housing" now means money that left your hands on either path, so the owner's down payment and the renter's deposit both appear in it. What comes back differs, and the wealth rows say so: the down payment becomes equity, while the deposit is refundable capital this model assumes rolls into your next tenancy.
The spreadsheet and one glossary entry
The downloadable Excel model read investment returns the old way, so its return formula was updated to use CAGR and it is now version 1.2. Earlier versions redirect to it, and the change is recorded on the Input sheet. On its own defaults the renter's portfolio falls from ₹8.59 crore to ₹7.09 crore, a reduction of about 17.4%.
One figure in the glossary had gone stale against the new convention: a ₹10,000 monthly SIP at 12% reaches about ₹91 lakh over twenty years rather than the ₹1 crore quoted, once 12% means 12%. Every other published figure was rechecked against the engines and stands.
Where the prepayment calculator fits
The seventh calculator on the site shipped in the same release, and the two rate conventions meeting is its whole editorial point. A loan quoted at 8.25% nominal, charged monthly, is 8.5692% expressed as a CAGR. So the return you would need from investing a lump sum, instead of putting it into the loan, is 8.5692% rather than 8.25%. The prepayment break-even lands on the loan rate itself once both sides are quoted the same way, which is tidier than the slightly-above answer the old arithmetic produced. The reasoning behind whether to prepay a home loan or invest the same money is set out separately.
What the rate change did not touch
Nothing about how the site handles your figures has changed. Every calculation still runs in your browser, your calculator inputs are not sent to a server, and closing the tab discards them. The site's test suite contains 434 automated tests. One regression test feeds the old monthly rates back into the rent vs buy engine and reproduces the previous figures after adjusting for month-end contributions. That checks the rate conversion separately from the cash-flow timing correction.
Earlier updates
| Date | What changed |
|---|---|
| 30 July 2026 | Every calculator's starting numbers reset to the same ₹80 lakh metro flat and neutral defaults, after an audit found the Rent vs Buy defaults sitting a hair's breadth from their own break-even. |
| 21 July 2026 | Rent vs Buy India, rebuilt: a new Property Investment Calculator, a flexible comparison period, a reworked Excel model, and three calculation corrections. |