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Criteria for Buying vs Renting A House in India
Most people struggle while selecting the right option between buying vs renting a house.
It can be made simple if you understand what are those necessary points to be focused on.
So, we have mentioned below the most significant point to help you regarding this.
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Consider Your Financial Situation
This is a most practical and crucial point to take decisions over buying vs renting a house in India. Because renting is considered the cheapest option over buying a house
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Renting Costs
Renting costs covers the down payment, mobility costs, closing costs, renovation, and home maintenance-related expenses.
Sometimes the landlord collects the first and final month’s rent payment during the lease agreement as a security deposit.
Note:
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Buying Costs
Buying a house covers costs like property tax, homeowners association fees, monthly mortgage payments, maintenance & repair costs, and other related expenses.
And all this cost varies from location to location.
Mortgage payment holds loan principal and interest amount. This mortgage payment can fluctuate if property taxes and homeowners insurance premiums change.
The down payment is the significant cost paid to avail the homeownership. This down payment ranges between 3% to 20% of the home’s purchase price.
If the down payment is less than 20% then the lender may ask you to avail of private mortgage insurance (PMI). This can affect an increase in the monthly payment and the interest rate will also be higher due to a lower down payment.
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Buying vs Renting a House Calculator
To make things easier for you, we have added the important expenses to look upon during buying vs renting a house
Calculation for Buying a house
| Property Price | Rs. 10,000,000 |
| Down payment | Rs. 2,000,000 |
| Loan Amount | Rs. 8,000,000 |
| Loan Interest Rate | 11% |
| Loan Tenure (Years) | 20 years |
| Every Month’s EMI payable | Rs. 82,575 |
| Yearly property appreciation | 7% |
| Monthly maintenance cost of property | Rs. 6000 |
| Yearly property tax | Rs. 6000 |
Calculation for Renting a House
| Monthly Rent | Rs. 20,000 |
| Annual Rent appreciation | 8% |
| Rental Security Deposit | Rs. 60000 |
Income Data
| Net Monthly Take Home Salary | Rs. 100,000 |
| Basic Salary | Rs. 50,000 |
| HRA | Rs. 18,000 |
| Applicable Income Tax Rate | 30% |
| Expected Annual Salary Hike | 10% |
Other Costs
| Inflation | 7% |
| Registration & stamp duty | 6% |
| Current Rate on your fixed deposit | 9% |
| Brokerage | 1% |
Also check-out – Buying A Home In 2025: Top 10 Crucial Things To Remember
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Decide The Timespan To Live in One Place
The need of buying vs renting a house can be decided depending on how long you will live in the particular place.
If you plan to stay at a particular location for a long period of time like 10-20 yrs then owning a house will be beneficial for you. For more clarification, you can compare the rental cost and EMIs to make a decision.
If you are required to travel from location to location over a period of time then renting a house is a better option. Because buying a house for a short duration and reselling it over a short period of time is difficult.
However, renting a house helps to manage the accommodation need at a low cost and save wealth as well.
Also check-out – Delhi vs Gurgaon: Where You Should Invest In A Property?
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Consider Your Lifestyle Preferences
Homeownership helps you to live in your house as you want which includes renovating and every other need as well.
Whereas, renting a house makes you follow the regulations of the landlord. This limits you from following your lifestyle.
Also check-out – Latest Property Rates In Andheri 2025
Pros and Cons of Buying vs Renting a House in Mumbai
Pros and Cons of Renting a House
| Pros | Cons |
| Allows the freedom of mobility | It doesn’t provide you with any kind of equity |
| The maintenance payment will be done by the landlord | Limited availability to customize or to modernize your living space |
| The closing cost is not that expensive | Rent could rise over a period of time |
| The fluctuation chances of monthly housing expenses are minimal | Landlord can sell or decide to quit renting at any time |
| You can test drive and experience different living spaces. | Always has to follow the landlord’s guidances |
Also check-out – Best Hiranandani Projects In Mumbai
Pros and Cons of Buying a House
| Pros | Cons |
| You build and gain an asset over a period of time | Chances of closing price getting expensive is higher |
| House price can increase over the duration | Less Flexibility to shift to another place |
| You have a freedom to upgrade your living space | Responsible for every kind of house maintenance and repair works |
| You can avail tax benefits | Home price can decrease |
| It provides you kind of home stability | Recent changes in tax laws are minimizing tax benefits |
Also check-out – Best Tips To Rent Out Your Property
Facilities to Consider for Buying vs Renting a House
There are some needed facilities to look up to while selecting a place for buying vs renting a house.
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Employment Opportunities
Consider a place that has better employment opportunities to reduce the time and cost of traveling from place to place for jobs.
People will start migrating towards such places. And this will help with infrastructure growth as well.
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Transportation Facilities
Consider a place that has good transport facilities like trains, taxis, autos, mono, and metro.
If It is the center point of connection for various places then it will be an added advantage for the residences.
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Healthcare and Education Advancement
The place you select should have good healthcare and education facilities.
Healthcare facilities like it should have maximum clinics and hospitals with ambulances near to your place. So that you can get your health issues solved during emergency situations.
Education facilities with wide opportunities for schools, degrees, and higher education colleges. And those universities should focus on students’ personal, academic and professional development.
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Water and Electricity Supply
You should consider a place which has better water and electricity services.
And most of people prefer getting 24×7 water and electricity services at their residential places.
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Infrastructure Growth
The selective place should have a better physical and organizational structure and facilities,
These facilities cover buildings, roads, bridges, telecommunications, etc. Basically, these things make people’s life easier.
Mumbai, Chennai, Bangalore, Thane are some of the best places for reference of infrastructure growth cities.
Also check-out – How To Register Rental Agreement Online In Maharashtra In 2025 (Updated)
FAQs
| Which is financially better buying vs renting a house?
The answer to this depends on your financial situation, and the lifestyle & personal comfort you prefer. However, renting will be better considering the cost you need to spend. |
| What all costs come under renting a house?
Down payment, mobility costs, closing costs, renovation, and home maintenance-related expenses are some of the expenses you have to spend while renting. |
| What all costs come under buying a house?
Property tax, homeowners association fees, monthly mortgage payments, maintenance & repair costs, and other related expenses come under buying a house. |
