Option 1
Income tax
Option 1 · net position
Option 2 · net position
Option 2 catches up
Net position over time
What each option owns that year, minus everything it has paid for housing so far. Higher is better.
Option 1 · rented house + owned plot
Option 2 · flat to purchase
What you own
Option 1: the owned plot plus the rent deposit. Option 2: the purchased flat minus the loan still owed. Both after selling costs.
Option 1 · owned plot
Option 2 · purchased flat − loan
What you've paid so far
Running total of housing payments.
Option 1 · rent, plot upkeep, moving
Option 2 · one-time costs, EMI, maintenance
Who's ahead each year
Option 2's net position minus Option 1's.
Option 1 ahead
Option 2 ahead
Rent vs EMI: what you pay each month
Average per month in each year, one-off costs included.
Option 1 · rent + plot upkeep
Option 2 · EMI + maintenance + tax + repairs
What would flip the result
Each line changes one assumption, keeps the rest as set, and finds the value where the two options come out equal.
What each option holds
Milestones
Year-by-year table
How this is worked out
Each option is calculated only from its own money, so changing rent affects Option 1 alone, and changing the EMI, maintenance or flat price affects Option 2 alone.
- Option 1 stays in the rented house and keeps the owned plot. It owns the plot, which grows at the rate you set, and the refundable rent deposit. It pays rent, plot upkeep, deposit top-ups, and a month's brokerage plus shifting whenever you move.
- Option 2 sells the owned plot and purchases the flat. It owns the flat minus the loan still owed, plus the rent deposit you get back when you move out. It pays the one-time costs (stamp duty, registration, brokerage, legal fees, refurbishment), then EMI, maintenance, property tax and repairs instead of rent.
- Net position is what the option owns, after selling costs, minus what it has paid. The option with the higher net position has left you better off.
Payments can be counted at face value, or with the returns that money could have earned at the rate you set. A rupee paid in stamp duty today costs more than a rupee of rent paid in year 15, because today's rupee could have grown in the meantime. Interest compounds monthly, and costs rise once a year.
The flat's value can be modelled in one of two ways. Land + ageing building grows the land share (UDS) at the local land rate. The building is valued at replacement cost, which rises with construction costs, and loses value evenly over its life. One growth rate applies a single annual appreciation to the whole flat.
The capital-gains exemption on selling the owned plot (Section 54F, reportedly section 86 of the Income-tax Act, 2025) is assumed to apply, so the default tax on selling now is ₹0. It can be withdrawn if you buy another house within 2 years, or build one within 3 years, of the sale. If that applies, enter the tax under "Option 2: down payment & loan". Tax on future sales is not deducted from either option.
Income tax. Under the new regime neither option gets a housing deduction. Under the old regime:
- Option 2 deducts home-loan interest up to the limit you set (Section 24(b)), plus loan principal within any unused 80C room.
- Option 1 claims the HRA exemption, which is the least of three amounts: HRA received, rent minus 10% of basic, and 50% of basic in the four metro cities or 40% elsewhere.
- Tax saved reduces that option's payments.
This compares the two housing options under the same regime. Which regime suits you overall also depends on your other deductions.
The starting values are examples based on Indian conditions in September 2026. Stamp duty, maintenance, rents and land growth vary widely by state, city and project, so replace them with local figures.
- Repo rate 5.25% (August 2026); home loans from about 7.5–7.75% — Forbes India, HDFC
This is a planning model, not financial advice. Please confirm the tax points with your CA.