The dream of owning a home, once a straightforward goal for India’s middle-income population, has become a complex financial dilemma over the past 25 years. With soaring property prices and high loan burdens, many are reconsidering the advantages of renting over buying.
Home Loans and Interest Make Ownership Costly
In 2025, a ₹1 crore home loan can cost buyers nearly ₹93 lakh in interest over 20 years. Analysts point out that the combination of rising property prices and high EMIs often exceeds rental returns, making the financial case for buying a home less attractive.
“In cities like Delhi-NCR, the EMI for a 2BHK can reach ₹75,000, while rental income barely touches ₹30,000-35,000,” said industry experts. The gap between monthly EMIs and potential rent has widened dramatically, prompting many to rethink their housing decisions.
Lifestyle, Mobility, and Opportunity Costs
For young professionals, lifestyle choices, job mobility, and opportunity costs now play a major role in the decision to buy a home. Investing the down payment in mutual funds offering 7-9% returns is often more lucrative than locking money in property.
CA Nitin Kaushik emphasises, “Rent is not wasted money. People should evaluate their income stability and 7-10 year needs before making housing decisions.”
Government Schemes Provide Limited Relief
While schemes such as the Pradhan Mantri Awas Yojana (PMAY) and stable interest rates of 8-9% offer some support, property prices in cities like Bengaluru and Pune continue to rise 13-15% annually in prime areas, deterring first-time buyers.
Renting vs Buying: Who Benefits?
Financial planners suggest that renting is more suitable for young professionals seeking flexibility and lower entry costs. On the other hand, purchasing a home is advantageous for long-term residents looking to gain equity and enjoy tax benefits.
As 2025 approaches, Indians face a tough choice: pursue the emotional dream of homeownership or embrace the financial freedom and flexibility offered by renting.