"Rent Is Waste"
Is A Lie
"Renting is throwing money away. Buy a home, build equity." Your parents said it. Society says it. Even your friends say it.
Here's what the math says: A ₹50L home costs ₹93L after 20 years of loan. You pay ₹43L in interest. Rent that same home for ₹15K/month, invest the difference in index funds? You're ₹60L richer.
The Math Is Brutal:
₹50L home with 80% loan = ₹40L borrowed @ 8.5% for 20 years = ₹42L interest paid. Total cost: ₹92L for a ₹50L asset. Meanwhile, renter with ₹10L down payment + monthly investing has ₹1.2 crore after 20 years.
20 Years Later: Buy vs Rent
REAL MATHThe Brutal Truth About "Building Equity"
Everyone says buying is smart. Let's do the actual math.
Home Loan: You Pay 84% Extra
"Build equity" they said. Banks build equity. You build debt.
You paid ₹92L for a ₹50L house. That's 84% extra. Where's the "equity"?
Renting + Investing Destroys Buying
Same ₹50L scenario. Rent instead. Invest the difference.
₹2.9 Cr vs ₹50L house. Renter is ₹2.4 Cr richer. Still think rent is waste?
Hidden Costs Nobody Tells You
EMI is just the start. Owning is expensive.
Renter pays none of this. Landlord does. Add this to your ₹92L home cost.
But Property Appreciates, Right?
Reality Check: Indian residential real estate returns 5-8% annually (data: Knight Frank, NHB). Meanwhile:
- Index funds return 12-15% annually
- You have liquidity (sell anytime, no broker, no months of waiting)
- No maintenance, no property tax, no society drama
- Can move cities for better job opportunities without losing lakhs in brokerage and stamp duty
Unless your property beats 12-15% returns consistently, you're losing money.
When Should You Actually Buy?
Not never. But not now for most Indians.
Ready to Buy
₹50L home = ₹20-25L saved. Small loan = less interest = faster payoff.
Job transfers, career switches destroy home buyers. Only buy if settled.
₹1L salary = max ₹30K EMI. Not ₹50K. Banks will approve ₹50K. Don't take it.
After down payment. Job loss + EMI = disaster without buffer.
You want permanent home for family. Not "property will double in 5 years."
No credit card debt, personal loans. Only low-rate home loan.
Don't Buy Yet
80-90% loan = drowning in interest. You'll pay double the home price.
Career growth, transfers, opportunities. Selling home = 5-8% lost in brokerage + stamp duty + months wasted.
Banks approve this. Don't take it. One salary cut = default = home gone + credit destroyed.
Used all savings for down payment? One crisis = missed EMIs = foreclosure.
This is 1990s India. Now it's 5-8%/year. Less than index funds. You're losing.
"Everyone is buying." Everyone is also broke. Don't be everyone.
The Smart Home Buying Roadmap
If you still want to buy after seeing the math, do it right.
Decide: Buy vs Rent (Honest Math)
CRITICAL DECISIONBefore saving a single rupee, do the math. Most Indians should rent for 10+ years.
Home price + 20-year interest + maintenance + property tax + opportunity cost.
Use our Home Loan Calculator
Rent cost for 20 years + down payment invested + monthly EMI-rent difference invested @ 12%.
Compare final net worth. Be honest.
If you're not 100% sure you'll stay in same city for 10+ years, DON'T BUY.
Selling within 5 years = guaranteed loss.
Save 40-50% Down Payment (Not 20%)
GAME CHANGERBanks push 80-90% loans. Trap. Save 40-50% down payment. Transform your finances.
₹50L home: 20% down = ₹43L interest. 50% down = ₹13L interest. ₹30L saved.
Takes 3-5 extra years to save. Worth every paisa.
₹50L home, 50% down = ₹25L needed. At ₹40K/month savings = 52 months (4.3 years).
Keep in debt fund or FD. Low risk. Liquid.
₹25L down payment + ₹5L emergency fund = ₹30L total needed.
Never touch emergency fund for down payment. Never.
Buy Smart: Under-Budget, Right Location
EXECUTIONMost Indians buy maximum bank approves. Recipe for disaster.
Bank approves ₹70L loan? Buy ₹40-45L home. Leave buffer for life, emergencies, investing.
EMI under 30% salary. Not 50%. Give yourself breathing room.
2 BHK in prime location > 3 BHK in suburb. Resale value + rental demand = location.
Schools, hospitals, offices nearby. Not "upcoming area."
Ready-to-move = no builder delays. See actual flat. No 3-5 year waiting hell.
Under construction = risk. Delayed possession = double rent + EMI.
Hire lawyer for title verification. RERA registration mandatory. Check encumbrance certificate.
₹10-15K for lawyer > ₹50L stuck in legal battle.
Kill Loan Fast: Prepay Aggressively
FREEDOM20-year loan? Aim for 7-10 years payoff. Every prepayment saves lakhs in interest.
Bonus, increment, refund = prepay loan. Home loan is 8.5% guaranteed return.
₹40L loan prepaid by ₹2L/year = done in 12 years. Save ₹20L+ interest.
When prepaying, choose "reduce tenure" option, not "reduce EMI." Kills loan faster.
20-year loan can become 8-10 year loan. Freedom.
Once loan is small (₹3-5L), then start SIPs. Not before.
Killing 8.5% loan > hoping for 12% equity returns.
The Final Truth About Home Ownership
"Renting is waste. Buy a home." This worked in 1980s-1990s India when property doubled every 3-5 years and loans were rare.
In 2024, the math is different:
- Property appreciation: 5-8% per year (not 20-30%)
- Index fund returns: 12-15% per year
- Home loan interest: 8.5% (you pay this to banks)
- Maintenance + taxes: ₹1-1.5L per year
- Job mobility: Critical for career growth (home ties you down)
The math is brutal: Renter who invests down payment + EMI-rent difference ends up with ₹1-2 Cr more wealth than buyer after 20 years.
But if you still want to buy (stability, family, emotional reasons), do it right:
- Save 40-50% down payment (not 20%)
- Buy under-budget (not max approved)
- EMI under 30% salary (not 50%)
- Kill loan in 7-10 years (not 20-25)
- Stay in same city 10+ years
We are the Frugal Few. We make decisions with math, not emotion.
Society says buy. Parents say buy. Friends say buy. We say: Do the math first. If renting + investing makes you ₹70L richer, rent. If buying gives stability you can't price, buy smart. But never, ever buy because "everyone is buying." That's how you stay poor.
Make The Right Decision With Data
Use our calculators to see your actual numbers.