Rent vs buy in Bengaluru:
which one actually builds wealth.
Bengaluru's rental yields are low — often 2–3% of the property value a year — which changes the maths more than most buyers expect. Enter your own numbers and see the total cost of each path, and the year one overtakes the other.
Run your own numbers.
Enter your rent, the home price, how you'd finance it and what you'd do with the money instead. The calculator assumes rent rises 5% a year and simulates both paths month by month, so the result reflects compounding, not a rough average.
Assumes rent rises 5% a year and stamp duty, cess and registration together cost about 7.6% of the price (see the stamp duty calculator for the exact breakdown). Change the return-if-invested figure to whatever you'd realistically earn on the money — a savings account, mutual funds or something else.
- Home value after years
- Remaining loan balance
- Your equity (buy path)
- Total EMI paid
- Total rent paid, at 5%/year escalation
- Down payment + costs, invested instead
- Net worth: buy path vs rent-and-invest path
Illustrative model, not financial advice — it doesn't account for tax breaks on home loan interest, maintenance and society charges, or the value of not being a tenant. Talk to us or your CA before deciding on the strength of this alone.
The rental yield problem.
In most Bengaluru micro-markets, annual rent runs at roughly 2–3% of the property's value — a ₹3.5 crore home renting for somewhere around ₹70,000–₹1,05,000 a month. That's a low rental yield by global standards, and it means the "cost" of renting, in pure cash-out terms, is small next to the price of the home. The flip side: it also means the down payment and closing costs you'd otherwise put into the house are free to be invested elsewhere, and compounding on that money adds up over a decade.
Buying still wins over long enough periods, or when price growth in a specific micro-market runs well ahead of general returns — some Bengaluru corridors near new metro lines or tech campuses have appreciated faster than the city average for stretches of time. But "property always beats rent" is not a safe assumption on its own; it depends on the gap between your expected price growth and what you'd otherwise earn on the money, and on how long you actually plan to hold.
Two numbers do most of the work in this decision: how fast you expect the specific property to appreciate, and what return you'd honestly get if you invested the difference instead. Change either one by a couple of percentage points and the answer can flip. That's the whole reason to run the numbers on your own assumptions rather than trust a rule of thumb.
What the calculator doesn't price in, and you should weigh separately: the tax deduction on home loan interest and principal, maintenance and society charges on an owned home, the stability of not depending on a landlord's renewal decision, and the fact that a home is a forced, disciplined form of saving in a way a brokerage account often isn't.
Rent vs buy in Bengaluru — answered.
Is it better to rent or buy a home in Bengaluru right now?
It depends on the gap between two numbers: how fast you expect that specific property to appreciate, and what return you'd realistically get investing the down payment and the rent-EMI difference elsewhere. At Bengaluru's typical rental yields of 2–3%, renting and investing the difference often builds more net worth over 10–15 years than buying does, unless your property appreciates well above the city average or you plan to hold for a very long time. Run your own numbers above rather than relying on a general rule.
Why does a low rental yield favour renting?
A low yield means rent is small relative to the home's price, so the cash a renter keeps free — the down payment, stamp duty and any month the EMI would have cost more than rent — is larger and compounds for longer. That capital, invested at a reasonable return, can outgrow the property's appreciation, especially if the property grows at the city average rather than an above-average corridor.
What return should I assume if I invest instead of buying?
Use a return you would honestly and consistently earn, after tax, on the specific money — not an optimistic best case. A diversified equity portfolio has historically returned more than a savings account or fixed deposit over long periods, but it also carries more volatility that a home purchase doesn't. Run the calculator at a conservative and an optimistic number and see how much the answer moves.
Does this calculator account for tax benefits on a home loan?
No. Home loan interest and principal repayment carry tax deductions under the Income Tax Act that this tool doesn't model, and they improve the buying case. It also leaves out maintenance, society charges and brokerage on a future sale, which work the other way. Treat the result as a starting point, not the full picture, and get the exact numbers checked against your own tax situation.
How much does stamp duty and registration add to the cost of buying?
In Karnataka, stamp duty, cess, surcharge and registration together come to roughly 7.5–7.6% of the property value for most homes above ₹45 lakh inside a city corporation. That's built into this calculator's upfront cost. Use the stamp duty calculator for the exact figure on your number.
What's a realistic property appreciation rate to assume in Bengaluru?
City-wide averages over long periods have generally run in the mid-single digits annually, though specific corridors near infrastructure like metro extensions or large tech campuses have outpaced that for stretches of time and others have lagged. Don't assume your specific project or locality will match a headline city number — ask about the track record of that micro-market specifically before you set this input.
If renting comes out ahead, does that mean I shouldn't buy?
Not necessarily. The calculator measures net worth, not everything that matters to a household — certainty of tenure, not depending on a landlord, the discipline of a forced monthly payment, and simply wanting your own home all have real value that doesn't show up in a spreadsheet. Use the number as one input to the decision, alongside how long you plan to stay and what stability is worth to you.
Get this run
on your real numbers.
Send your details and we'll work through the rent-vs-buy maths, the tax side and the trade-offs together.