Is renting really cheaper than buying?

Because they buy different things. Part of every instalment repays principal, which is money moving from one pocket to another and staying yours. Rent is entirely gone. So a ₹43,000 instalment and ₹43,000 of rent are not equivalent outgoings, and the comparison flatters renting.

The comparison also flatters buying in a different way if you stop there, because it ignores what the deposit would have earned had it been invested. Netting both effects out is why this page compares net worth at the end rather than monthly cash flow.

Annual rent divided by the property price. Across most Indian metros it sits between 2% and 3%, which is low by international standards. A 2.5% yield means renting costs you 2.5% of the asset’s value a year while owning it costs you a mortgage at 8.5% plus upkeep. That gap is the strongest arithmetic argument for renting in India, and it is why the answer here differs from the same calculation in markets where yields run at 5% or more.

Long enough to absorb the transaction costs, which is usually the binding constraint. Stamp duty, registration and associated charges are around 7% to 8% on the way in, and brokerage on the way out. Over three years that cost is spread thinly and hurts a great deal; over fifteen or twenty it barely registers. If there is a real chance you will move within five years, that fact matters more than any of the rate assumptions on this page.

For someone in the old regime, yes, and this page does not include it. Home loan interest is deductible up to ₹2 lakh a year on a self-occupied property, which at a 30% slab is worth up to ₹60,000 a year and lowers the effective cost of the loan considerably. Under the new regime, which is now the default, there is no such deduction and buying is correspondingly more expensive.

Then buying wins, and this is the assumption to test rather than accept. It is also the one nobody can supply. Indian property has risen sharply in some cities and periods and gone nowhere in real terms in others, and the national average is not a thing anyone lives in. If you have a genuine view about the specific micro-market, use it. If you do not, run the page at a few different rates and see how wide the answer is.

Maintenance and society charges, property tax, repairs, and the periodic large item such as a roof, a lift or exterior work. A common rule is 1% of the property value a year across the long run, which on an ₹80 lakh flat is ₹80,000 a year that a renter simply does not pay. It is on this page as an input because people consistently model it at zero and then wonder why the arithmetic disagreed with their experience.

It is an asset that you also live in, which makes it a different thing from an investment. A home you occupy produces no income, carries costs, cannot be sold in pieces, and is usually the largest single concentration in a household’s balance sheet. That does not make buying wrong. It does mean the question is whether you want to own the house you live in, which is a different question from whether residential property is the best place for your money.

How long you will stay, whether you would genuinely invest the difference, and how much you value not being asked to move. The arithmetic on this page is real and it is rarely the deciding factor at Indian rental yields, because the numbers are usually close enough that the non-financial considerations dominate. That is an honest conclusion rather than a hedge.