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Buying or Renting a House: Factors, Cost Comparison, Benefits, Pros and Cons
Published : January 31, 2025, 12:00 AM
Updated : August 13, 2025, 4:33 PM
Author :
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Table of Contents
The answer to what is better, buying or renting, is a very tough one. People have different views on what makes sense for them based on various factors like their families, their jobs, their financial standing and their personal desires.
But, since we wanted to understand what most people are likely to do in 2025, buy or rent, we looked at market trends, interest rates, property price movements, and changing lifestyles. In this blog, you’ll learn more about whether to rent or buy a home in 2025.
Buying or Renting a House: A Quick Information 2025
Rising rents in metro cities, attractive home loan offers, and the emotional security of owning a home are pushing many towards buying. On the other hand, high property prices in prime areas, the flexibility of relocation, and the ability to invest savings elsewhere are keeping renting relevant for a large segment.
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| Factor | Buying a House | Renting a House |
| Ownership | Full ownership after purchase | No ownership |
| Upfront cost | High (Registration, down payment) | Low (Advance rent, security deposit) |
| Monthly cost | EMI + Maintainance | Monthly rent |
| Flexibility | Less flexible | High flexibility |
| Long-term investment | Property value may appreciate | No asset gain |
| Maintenance responsibility | Owners responsibility | Landlords responsibility |
| Tax benefits | Eligible for tax deductions | Not eligible for tax benefits |
| Best for | Long-term stability | Short-term stay |
Pros and Cons of Buying a House
Here are the pros and cons of buying a house:
| Pros | Cons |
| Full ownership and long-term stability | High upfront costs |
| Builds equity over time | EMIs may be higher than rent |
| Property value may appreciate | Selling can be time-consuming |
| Eligible for home loan tax benefits | Maintenance and repair costs are borne by the owner |
| Suitable for long-term investment | Less flexibility to move |
Pros and Cons of Renting a House
Here are the pros and cons of buying a house:
| Pros | Cons |
| Low upfront cost | No ownership |
| Greater flexibility to move anytime | Rent may increase over time |
| No long-term commitment | Limited freedom to renovate |
| No maintenance costs | May have to deal with landlord issues |
Cost Comparison: EMI vs Rent
Below is the table for the cost comparison of EMI vs rent:
| Cost comparison | EMI (Home loan) | Renting a house |
| Monthly payment | Higher (based on loan type and tenure) | Lower |
| Ownership | Full ownership | No ownership |
| Upfront cost | High | Low |
| Tax benefits | Yes | No |
| Annual increase | Fixed | Likely to increase |
| Appreciation benefit | Yes | No |
| Maintenance cost | Paid by owner | Borne by the landlord |
| Equity | Builds equity in property | No returns |
| Long-term savings | Potential appreciation | No asset at the end |
Tax Benefits of Buying vs Renting
Here are the tax benefits of buying vs renting:
Buying:
- You can save tax up to 2 lakh on the interest paid for a home loan.
- You can also get tax benefits on the loan principal.
- You can claim tax benefits on stamp duty and registration under Section 80C.
- If it's your first home, you may get an extra 50000 or 1.5 tax benefit under Section 80EE.
Renting:
- If you live in a rented house and get HRA in your salary, you can claim tax exemption on the rent you pay.
- There is no need for a home loan or interest payments to get HRA benefits.
Lifestyle & Flexibility Considerations
When thinking about buying vs renting a home, lifestyle and flexibility are important. Renting provides more freedom, and you can move easily for a new job or a better location. It's great for people who like change or are not sure where they want to settle.
On the other hand, buying a home gives you control and stability. You can decorate it the way you want, build a connection with the neighbourhood and stay long-term. But it also means more responsibilities, like maintenance and loan payments.
Thus, if you value freedom and easy movement, renting suits is better. If you want long-term comfort and a place to call your own home, buying might be the right choice.
When is Buying Better?
Buying makes better sense when the difference between rent and the EMI is small. Also, it makes sense when you’re looking for long-term stability, want to avoid rising rents, or want to build an asset that grows over time. As per the Hindustan Times article, many netizens chose to invest in property after facing intrusive landlords, the frustration of frequent shifting or lack of privacy. If you’re financially stable and plan to stay in one place for several years, buying is better.
When is Renting Smarter?
Renting is the better choice when flexibility is your priority. Renting helps avoid big upfront costs like down payments, home loan EMIs, and maintenance charges. For those early in their careers or unsure about where they want to settle, renting provides freedom without long-term commitment.
Buying or Renting in Top Indian Cities
Here are the 5 Top cities:
1. Hyderabad
Out of the 6 cities that we collected data from, renters in Hyderabad were the keenest to buy homes. Here, 69% of renters were looking to buy homes this year (2024). In 2025, the property rates rose to 8% and the property prices has reached 8,000 - 8,250 per sq ft.
2. Bangalore
Here, the enthusiasm to buy homes was not far behind as 65% of renters in the city were looking to buy their own homes.
3. Mumbai
Despite how expensive houses in Mumbai are, a whopping 59% of renters are looking to buy their own homes in Mumbai.
4. Pune
Renters in Pune too, want to move into or own their own homes. Here about 56% of renters are looking to buy a home in 2024.
5. Chennai
In Chennai, about 55% of renters are looking to buy a home. This is not too far behind compared to the other cities.
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Frequently Asked Questions
Ans. It depends on financial situation, long-term plans, and market conditions.
Ans. There is no ownership or return on rent paid, limited freedom to customise the property, possible rent hikes, and the risk of the landlord.
Ans. It includes full ownership, long-term stability, property value appreciation, freedom to renovate, and eligibility for home loan tax benefits.
Ans. The guideline is the 28/36 rule, your home loan EMI should not exceed 28% of your monthly income, and your total debt should not exceed 36% of your income.
Ans. In most metro cities, renting is cheaper in the short term, especially if property prices are high and rental yields are low.
Ans. Evaluate your job stability, location preference, long-term plans, and potential investment returns.
Ans. Yes, if you receive House Rent Allowance (HRA) as part of your salary, you can claim a deduction under Section 10(13A).
Ans. The 30% rule suggests spending no more than 30% of your gross monthly income on housing costs, whether rent or EMI.
Ans. No, property values can fluctuate based on location demand, economic conditions, infrastructure development, and market cycles.
Ans. The break-even point is the time it takes for the total cost of buying (EMIs, taxes, maintenance) to equal the total cost of renting.
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