Should You Rent or Buy? The Ultimate Decision Framework

Rent vs. buy isn't a yes/no question—it's a personal economics question. Here's how to decide what's right for your situation.

The Financial Variables That Matter

Compare true costs: rent vs. mortgage + taxes + maintenance. Consider your time horizon (you need 5+ years for buying to make sense), local price appreciation rates, and your financial flexibility. Use online calculators to compare scenarios.

Question 1: How Long Will You Stay?

Buying costs 2-5% in transaction fees just to acquire. If you'll move in 2 years, renting wins. If you'll stay 5+ years, buying usually wins financially. Shorter timelines favor renting.

Question 2: Can You Build Equity?

With rent, you build your landlord's equity. With mortgages, you build your own. This is the biggest advantage of buying. Over 20 years, this difference is staggering. But it requires stability.

Question 3: Do You Want Flexibility?

Renters can relocate with minimal cost. Buyers are locked in. If your career is volatile or you value flexibility, renting is freedom. If you want roots and stability, buying provides them.

Question 4: What's the Local Market?

In rapidly appreciating markets (Bangalore, Mumbai, Delhi), buying early is smart. In stagnant markets, renting might be smarter. Check 5-year price trends in your target area.

Question 5: Can You Afford the Down Payment and Closing Costs?

You need 20-30% down payment + 2-5% closing costs. That's significant capital. If you don't have it readily available, renting while you save might be wisest.

The Decision Framework

If you answer YES to most of these: "Will I stay 5+ years? Do I want to build equity? Is the local market appreciating? Can I afford down payment? Do I want stability over flexibility?" — Buy. If you answer NO or are uncertain — Rent and revisit in 1-2 years. Ishanya AI can help you explore both options. Let us show you realistic buy scenarios so you can make an informed decision.