In most Indian metros, renting costs 2-3% of the property value annually. At a 9% home loan rate, the EMI on the same property costs 8-10% of value per year. Short-term (under 7-8 years), renting is almost always cheaper.
Worked examples
Rahul, 32, Delhi — ₹1.5Cr flat, ₹35,000 rent alternative
Rahul can buy a ₹1.5Cr flat (₹25L down + ₹1.25Cr home loan at 8.5% for 20 years, EMI ~₹1.09L) or rent a similar flat for ₹35,000/month and invest the ₹74,000 monthly surplus in SIP at 12%. After 20 years: Renting+SIP gives a corpus of ~₹6.9Cr. Buying: property worth ~₹4.8Cr at 6% appreciation, minus ₹2.6Cr in total EMI outflow. Net wealth: ~₹2.2Cr vs ₹6.9Cr. But owning outright has emotional value the math misses.
Frequently asked questions
Is renting or buying better in India in 2026?
It depends on city, tenure, and property appreciation. In most metros with 35+ price-to-rent ratios, renting is financially better for under 10 years. For 15+ years in a high-appreciation location, buying usually wins.
What is a good price-to-rent ratio in India?
Below 15: buying is clearly cheaper. 15-25: comparable. Above 25: renting is likely cheaper. Most Mumbai/Delhi properties sit at 30-50, making renting financially rational unless appreciation is high.