Finance question
Is it better to rent or buy a house?
Last updated 2026-09-17
Quick answer
Buy if you will stay long enough for rent inflation and principal repayment to matter, you can pay stamp duty and a down payment without emptying the emergency fund, and the EMI is comfortable. Rent if the city is temporary, the EMI is far above rent, or the down payment would be better compounding in a long SIP. Stamp duty is not one India-wide percent — we will not invent your state’s rate.
Calculate your numbers
Tables below use stated assumptions. Change rate, tenure or income in the calculator for your case.
Open Home loan EMIEMI is not rent
Part of EMI is principal — that is forced saving. Rent is 100% expense. That does not automatically make buying cheaper: you also pay stamp duty, registration, society charges, and you lock capital in one city.
Worked sketch
₹80 lakh flat, 20% down (₹16 lakh), 8.5% for 20 years on ₹64 lakh. Check EMI in the home-loan calculator. If rent for a similar home is ₹32,000 and EMI is ₹55,000, the ₹23,000 gap plus investing the ₹16 lakh as SIP is the rent case. If you stay 15 years, rerun both sides — there is still no universal winner.
Formula
Compare (rent + investable surplus) versus (EMI + maintenance − tax effects). Down payment invested in a SIP is the opportunity cost of buying.
Example scenarios
EMI on the loan after a 20% down payment (8.5%, 20 years) — not total cost of buying
| Property price | 20% down | Loan | EMI |
|---|---|---|---|
| ₹50,00,000 | ₹10,00,000 | ₹40,00,000 | ₹34,713 |
| ₹75,00,000 | ₹15,00,000 | ₹60,00,000 | ₹52,069 |
| ₹1,00,00,000 | ₹20,00,000 | ₹80,00,000 | ₹69,426 |
| ₹1,50,00,000 | ₹30,00,000 | ₹1,20,00,000 | ₹1,04,139 |
Excludes stamp duty, registration, interiors and maintenance. Those are state- and society-specific.
What changes the answer
- Years you will stay
- Rent vs EMI gap
- Job mobility
- Stamp duty (state)
- Interest rate
Things to consider
- Never skip location-specific stamp duty — look up your state; we do not use a fake 5% or 7% national rate.
- 8.5% / 20 years / 20% down in the table. Opportunity cost not fully IRR’d.
Results are educational estimates, not tax, legal, investment, or medical advice, and not a loan offer. Verify filings and payments with the official authority or a qualified professional.
FAQs
No. You pay for flexibility. Buying throws money at interest, tax and maintenance too.