The great urban dilemma: Should you keep renting or lock in the same amount in home loan?
Experts agree that the decision between renting and owning depends on financial stability, mobility, long-term goals, market conditions, and lifestyle preferences.
- Oct 4, 2025,
- Updated Oct 4, 2025 4:10 PM IST
For salaried professionals in India’s metros, the debate between renting a house and purchasing one with a home loan is both financial and emotional. Renting is often seen as flexible, with lower upfront commitments, while buying promises long-term stability and asset creation. With rents rising sharply across prime neighbourhoods, however, the question of “rent vs. buy” is becoming more pressing for young households.
Consider the situation of a 31-year-old professional in Bommanahalli, Bengaluru. Married with a toddler, he currently rents a 3BHK flat (1,550 sq. ft.) in a gated society for Rs 40,000 a month, including maintenance. His landlord, based overseas, has now offered to sell the property for ₹92 lakh.
With a combined household income of Rs 4 lakh per month (Rs 2.7 lakh from him and Rs 1.3 lakh from his wife), the couple has saved Rs 25 lakh for a down payment and is evaluating a Rs 67 lakh, 15-year home loan. The loan would carry an EMI of around Rs 70,000 per month. Market rents for comparable homes are projected to rise further, to Rs 42,000–Rs 45,000, forcing the family to weigh ownership against continuing as tenants.
Buying makes sense for...
According to Animesh Hardia, Senior Vice President, Quantitative Research at 1 Finance, buying can make sense if the property’s valuation is fair and the family intends to stay for 7–10 years.
“Post-purchase, their EMIs would be about Rs 1.14 lakh monthly for the first 2.5 years, since they are also servicing an existing loan of ₹44,000,” he explains. “With a combined take-home of Rs 4 lakh, the EMI-to-income ratio stands at 28–29%, comfortably within prudent limits. Once the old loan ends, the ratio drops to 17–18%, which is healthy.”
Hardia highlights four reasons buying works:
Strong income cushion: Dual incomes ensure cash flow resilience even during the overlap of two loans.
Lifestyle stability: For a young family, staying in the same gated community provides value—continuity in daycare, safety, and social networks.
Rent vs. EMI math: Current rent already equals two-thirds of the EMI. With rents rising, the gap narrows further, while ownership builds equity and brings tax benefits.
Market fundamentals: Southeast Bengaluru has strong end-user demand, connectivity upgrades, and proximity to IT hubs—drivers that support long-term price appreciation and rental depth.
Counterpoint: Renting still makes sense
Not everyone agrees that homeownership is always the smarter move. Chartered Accountant Nitin Kaushik argues that the idea of rent being “wasted money” is a myth. He notes that home loans come with massive interest costs. For example, buying a Rs 1 crore flat with an ₹80 lakh loan at 9% interest over 20 years results in a monthly EMI of Rs 72,000. The borrower ends up paying Rs 1.73 crore in total, of which Rs 93 lakh is pure interest.
“EMIs often burn more money—you just call it investment,” Kaushik wrote in a post on social media platform X. He stressed that rent buys flexibility and liquidity, while home loans bring leverage and liability. Renting allows families to remain mobile and avoid being locked into long-term commitments, while ownership provides stability and the chance of equity build-up.
Experts agree that the decision between renting and owning depends on financial stability, mobility, long-term goals, market conditions, and lifestyle preferences. In short, owning provides security and potential equity, but renting offers adaptability—making it a decision that should be based on math, not emotion.
Bottom line
Ultimately, the decision to rent or buy depends on a household’s financial stability, time horizon, mobility needs, and lifestyle goals. For those planning to stay in one city for a decade or more, buying at the right price can create wealth and shield against rising rents. For others who value flexibility or face uncertain job mobility, renting remains a smart option. The key, experts agree, is to run the numbers with discipline—and make the decision based on math, not emotion.
For salaried professionals in India’s metros, the debate between renting a house and purchasing one with a home loan is both financial and emotional. Renting is often seen as flexible, with lower upfront commitments, while buying promises long-term stability and asset creation. With rents rising sharply across prime neighbourhoods, however, the question of “rent vs. buy” is becoming more pressing for young households.
Consider the situation of a 31-year-old professional in Bommanahalli, Bengaluru. Married with a toddler, he currently rents a 3BHK flat (1,550 sq. ft.) in a gated society for Rs 40,000 a month, including maintenance. His landlord, based overseas, has now offered to sell the property for ₹92 lakh.
With a combined household income of Rs 4 lakh per month (Rs 2.7 lakh from him and Rs 1.3 lakh from his wife), the couple has saved Rs 25 lakh for a down payment and is evaluating a Rs 67 lakh, 15-year home loan. The loan would carry an EMI of around Rs 70,000 per month. Market rents for comparable homes are projected to rise further, to Rs 42,000–Rs 45,000, forcing the family to weigh ownership against continuing as tenants.
Buying makes sense for...
According to Animesh Hardia, Senior Vice President, Quantitative Research at 1 Finance, buying can make sense if the property’s valuation is fair and the family intends to stay for 7–10 years.
“Post-purchase, their EMIs would be about Rs 1.14 lakh monthly for the first 2.5 years, since they are also servicing an existing loan of ₹44,000,” he explains. “With a combined take-home of Rs 4 lakh, the EMI-to-income ratio stands at 28–29%, comfortably within prudent limits. Once the old loan ends, the ratio drops to 17–18%, which is healthy.”
Hardia highlights four reasons buying works:
Strong income cushion: Dual incomes ensure cash flow resilience even during the overlap of two loans.
Lifestyle stability: For a young family, staying in the same gated community provides value—continuity in daycare, safety, and social networks.
Rent vs. EMI math: Current rent already equals two-thirds of the EMI. With rents rising, the gap narrows further, while ownership builds equity and brings tax benefits.
Market fundamentals: Southeast Bengaluru has strong end-user demand, connectivity upgrades, and proximity to IT hubs—drivers that support long-term price appreciation and rental depth.
Counterpoint: Renting still makes sense
Not everyone agrees that homeownership is always the smarter move. Chartered Accountant Nitin Kaushik argues that the idea of rent being “wasted money” is a myth. He notes that home loans come with massive interest costs. For example, buying a Rs 1 crore flat with an ₹80 lakh loan at 9% interest over 20 years results in a monthly EMI of Rs 72,000. The borrower ends up paying Rs 1.73 crore in total, of which Rs 93 lakh is pure interest.
“EMIs often burn more money—you just call it investment,” Kaushik wrote in a post on social media platform X. He stressed that rent buys flexibility and liquidity, while home loans bring leverage and liability. Renting allows families to remain mobile and avoid being locked into long-term commitments, while ownership provides stability and the chance of equity build-up.
Experts agree that the decision between renting and owning depends on financial stability, mobility, long-term goals, market conditions, and lifestyle preferences. In short, owning provides security and potential equity, but renting offers adaptability—making it a decision that should be based on math, not emotion.
Bottom line
Ultimately, the decision to rent or buy depends on a household’s financial stability, time horizon, mobility needs, and lifestyle goals. For those planning to stay in one city for a decade or more, buying at the right price can create wealth and shield against rising rents. For others who value flexibility or face uncertain job mobility, renting remains a smart option. The key, experts agree, is to run the numbers with discipline—and make the decision based on math, not emotion.