Renting a house or buying one through a home loan has been a common debate among people, especially among salaried individuals. It is typically believed that renting a house offers flexibility and lower financial commitment, while purchasing a home with a home loan is regarded as providing long-term financial security through asset creation. However, the choice between the two mainly depends on an individual’s personal preferences.
This long-standing debate was recently reignited by a chartered accountant in a detailed post on X, who highlighted his preference for rented houses.
CA Nitin Kaushik explained that the idea of rent being money wasted is a myth. Often, EMIs for home loans can be higher than renting costs, mainly due to substantial interest payments. Renting provides flexibility, whereas home ownership may result in financial liabilities.
His post read, “The ‘Rent is Waste’ Myth That’s Costing You Lakhs. ‘Rent money is wasted’ is the biggest scam middle-class families believed.”
Highlighting his opinion on the matter, Kaushik said, “EMIs often burn more money — you just call it investment.”
He also cited an example of a house costing ₹1 crore, bought with a home loan of ₹80 lakh at an interest rate of 9% for a tenure of 20 years. He further noted that the buyer will have to pay ₹72,000 per month as EMI, bringing the total amount to ₹1.73 crore.
Kaushik added, “That’s ₹93L extra (interest) — double the cost of renting the same house for years.”
Sharing his advice based on the example given above, Kauhsik said, “Rent isn’t always a waste. It buys you flexibility + liquidity. A home loan isn’t always investment. It’s leverage + liability. Owning vs Renting isn’t about emotions. It’s about math + timing.”
Rent vs EMIs: What factors should you consider?
Financial security
Financial security is crucial, as monthly payments require a stable income, according to Aman Gupta, Director, RPS Group.
“You need to be able to afford repayments without compromising on essentials,” according to Anurag Goel, Director, Goel Ganga Developments.
Highlighting long-term financial security, he added, “uncertainty about the future, because commitments such as EMIs shackle you for decades while rent gives you the nimble means to change direction.”
Mobility and maintenance
Job mobility favours renting due to its flexibility, allowing individuals to pursue transferable careers without the burden of maintenance responsibilities that homeowners face, according to these real estate experts.
Security vs liquidity
An individual’s long-term goals are important; ownership offers security while renting provides liquidity.
“Long‑term goals matter—owning provides a sense of security, while renting aids in liquidity,” Gupta said, while Goel advocated for asset creation through owning a house, which becomes equity; on the other hand, rent is a recurring expense.
Market conditions
According to Gupta, the appreciation or depreciation of property creates market opportunities that cannot be overlooked by individuals who are still confused about whether to own a house or rent one.
Lifestyle choices
Other factors that may determine the decision to own a house or rent will depend on an individual’s personal preferences. Lifestyle choices such as proximity to work, amenities or the next community goal could influence the decision, as per Goel.
In conclusion, experts suggest considering factors such as financial security, job mobility, long-term goals, market conditions, and lifestyle choices when deciding between renting and EMIs. Renting offers flexibility and liquidity, while ownership provides security and potential equity growth.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
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