Rent vs buy calculator

It depends on how long you stay, how fast the home's value and the rent rise, and the loan rate against what your savings earn. Take the example: a Rs 1.5 crore flat let at Rs 70,000 a month, bought with 20% down and a loan at 15.43% over 20 years. Renting leaves you better off for the first 15 years and buying from year 16; after 20 years buying is ahead by Rs 1.38 crore. If you would move within ten years, renting comes out ahead, by Rs 38.05 lakh.

At 15.43% (1-year KIBOR of 12.43% on 29 September 2026 plus a 3% spread), a loan costs more than a home earns in its early years. In the example's first year Rs 18.45 lakh of the Rs 19.42 lakh of installments is markup, while the flat's rent is 5.6% of its price and savings earn 10.44% after tax. Buying catches up as the rent rises and the loan is paid down, and pulls ahead in year 16. A bigger down payment brings that forward: with 30% down, to year 14.

Without a loan there is no markup, so buying pulls ahead much sooner. The example flat bought outright is ahead of renting from year 3, and after 20 years by Rs 4.88 crore, because the rent it saves, 5.6% of the price a year, and its value growth of 7% together earn more than 10.44% on savings. A home that rents for less, or a value that grows more slowly, changes that, so try your own figures.

More than anything else. On the example over 20 years, buying and renting come out level at 5.5% value growth a year. If the value stood still, renting would be ahead by Rs 2.68 crore after 20 years; at 10% a year, buying would be ahead by Rs 5.49 crore. Over ten years the level point rises to 8.3%, as buying has less time to catch up.

Most rent agreements in Pakistan add 10% a year, which is the default. Over many years rents tend to follow values, so if you expect the home's value to rise 7% a year, try the rent rising 7% too: on the example renting then stays ahead for all 20 years, by Rs 1.06 crore, and buying pulls ahead only in year 32.

What you would really do with the money, after tax. The default is National Savings' ten-year Defence Savings Certificates, which paid 11.61% a year from 4 September 2026: a filer pays 15% tax on the profit, which leaves about 10.44% a year. Profit on a bank deposit is taxed at 20%. If the money would sit in an account paying less, use that rate: the lower it is, the sooner buying pulls ahead.

No. The home is counted at its full value, as you would still own it. If you sold, the agent's commission, usually 1%, would come off, and a filer pays 2.75% of the price as advance tax, which counts towards the capital gains tax of 15% of the gain on property bought since 1 July 2024. Confirm the tax on your own sale with the FBR or a tax adviser.