Owning a home pays off in 3–8 years in Bengaluru, Hyderabad; but takes 30+ years in Mumbai, Delhi: Study

The rent vs. buy dilemma has long divided home seekers and financial advisors — but a new study from personal finance firm 1 Finance Research offers a data-driven answer tailored to today's real estate and investment landscape. A new study by 1 Finance Research has thrown fresh light on the long-debated question of whether to rent or buy a home in India’s top cities. 

The findings reveal that homeownership breaks even within just 3 to 8 years in cities like Bengaluru, Hyderabad, and Pune, thanks to relatively moderate property prices and decent rental yields. In contrast, buying a home in cities like Mumbai or Delhi may take more than 30 years to become financially advantageous compared to renting.

The analysis is based on a city-wise comparison of 2 BHK and 3 BHK properties, considering both the cost of buying (including down payment, stamp duty, and loan EMIs) and the cost of renting (rent, deposits, and maintenance), along with investment returns on the saved capital. The breakeven point is when buying starts to generate more net worth than renting and investing the difference.

In Bengaluru, a 2 BHK home costs around Rs 1 crore and rents for Rs 40,000–Rs 55,000 a month. If a family plans to stay for more than 3–5 years, buying often creates more wealth than renting.

In Mumbai, a similar-sized home costs Rs 2.4 crore, but the rent ranges from Rs 55,000–Rs 85,000. With such steep home prices, it could take 30+ years before owning makes financial sense.

The study noted that cities like Hyderabad, Pune, Kolkata, and Thane also favor homeownership over renting within 4–8 years. On the other hand, Delhi, Gurugram, Noida, and Greater Mumbai show long breakeven periods, indicating that renting is the smarter choice unless buyers are staying put for decades.

Instead of just comparing home prices with monthly rents, the study dives deeper—factoring in every hidden cost of owning a home, including down payments, stamp duty, registration charges, EMIs, and more. On the renting side, it accounts for security deposits, maintenance, and rental payments.

But what truly sets this study apart is its inclusion of a critical question: what if the money saved by renting was invested instead? The researchers calculated the opportunity cost of capital, assuming renters put their savings into a diversified investment portfolio.

The breakeven timelines align with how real estate has performed over the past decade. For instance, Rs 50 lakh invested 10 years ago would have grown to Rs 2.24 crore in Gurugram (16.2% CAGR), but only to Rs 0.87 crore in Greater Mumbai (5.7% CAGR). Meanwhile, equity and gold delivered 13.5% and 12% annual returns, respectively.

Animesh Hardia, Senior VP of Quantitative Research at 1 Finance, stressed that while both renting and buying come with challenges, the decision should be made with careful financial planning: “Many people rush into buying without understanding the long-term costs or the city-specific breakeven horizon. It’s always better to align personal finances with expert real estate insights.”

What should you do in 2025?

Buying makes sense if you're planning to stay put in Bengaluru, Hyderabad, or Pune for the next 4 to 8 years—where home prices are reasonable and rental yields are healthy.

In Mumbai, Delhi, or other high-cost cities, renting is often the smarter choice, offering more flexibility and less financial strain.

Don’t follow the herd. Let the math—and your personal goals—lead the way. Weigh the costs, assess your time horizon, and seek expert advice before making one of your biggest financial decisions.