Rent vs Buy 2025: In 2025, renting a home in India’s major metros isn’t just about convenience anymore, it's fast becoming the more financially viable choice. With rental inflation easing to 7–9 per cent in cities like Bengaluru, Hyderabad, Mumbai, and Delhi-NCR, the numbers are finally tilting in favour of tenants.
But the story isn’t just about rent moderation. It’s about what hasn’t cooled: property prices. Despite repo rate cuts intended to nudge more buyers into the market, the EMI required to own a modest urban home has ballooned, widening the financial gap between renting and buying to its largest in recent years.
Average Rent In Tier I Cities Vs EMIs
According to NoBroker’s H1 2025 Rent Report, a typical 2BHK apartment in Bengaluru’s IT corridors places like Outer Ring Road or Sarjapur Road can be rented for Rs 35,000–Rs 45,000 a month. But buying that same flat would mean shelling out between Rs 90,000 to Rs 1.2 lakh in monthly EMIs, assuming a 20-year loan tenure with prevailing interest rates.
The math speaks for itself: “This stark comparison highlights that the monthly EMI is now typically 2.5 to 3 times higher than the monthly rent for a comparable property in many established micro-markets and city centers,” the report noted. Just two years ago, the gap had narrowed to 1.8 times when rents surged and prices stayed put. That moment, many believed, marked a turning point for ownership. Now, the pendulum has swung back.
How Different Cities Fared
In Gurgaon’s Golf Course Extension area flush with luxury high-rises and gated enclaves average rents range between Rs 50,000 and Rs 70,000. Buying a similar unit? Expect an EMI well over Rs 1.5 lakh. Despite steady demand, this pricing mismatch is cooling buyer interest while keeping landlords firmly in the green.
Investors in Pune’s Baner or Hyderabad’s Hafeezpet, for instance, are still clocking returns as infrastructure pushes rents upward. In Baner, 2BHK rentals average between Rs 30,000–Rs 38,000 per month. In Hafeezpet, the same configuration goes for around Rs 25,000–Rs 33,000. Yet, the EMI for purchasing those units, typically priced between Rs 1.2 crore to Rs 1.5 crore, would set a buyer back by Rs 90,000 to Rs 1.2 lakh every month, assuming 20-year home loans at 8 per cent interest.
For most salaried professionals, especially first-time buyers, that equation no longer works.
Chennai’s OMR corridor tells a similar story. Rentals for 2BHKs in areas like Siruseri and Padur hover between Rs 12,000–Rs 18,000. But with capital values climbing to the Rs 70–90 lakh range due to SIPCOT Phase 2 and metro expansions, EMIs easily touch Rs 55,000–Rs 75,000 monthly.
Kolkata’s New Town, once considered affordable, now sees 2BHK rentals at Rs 16,000–Rs 22,000, but buying a comparable unit, priced between Rs 65–85 lakh, means committing to EMIs of Rs 50,000–Rs 65,000.
The report points to a nationwide shift: “Even with the observed reduction in the repo rate during 2025… the underlying increase in property values has maintained a considerable financial barrier for many prospective homeowners.”
From a personal finance lens, the implications are clear. The cost of capital (EMIs), when compared to rental yields, makes homeownership an expensive long-term play more about asset creation than month-to-month savings. For many, it’s a trade-off they’re not willing or ready to make.
This recalibration isn’t just anecdotal. The data backs it up. Rental appreciation in Mumbai’s Eastern suburbs like Mulund and Chembur is running at 9–10 per cent, while property prices continue to climb far ahead of household income growth.
In North Bangalore, Devanahalli is seeing rents at Rs 12,000–Rs 17,000 per month for 2BHKs. Yet the area is pegged for 12–20 per cent rental spikes as the BIAL IT investment region expands and infrastructure gets a facelift. The catch? Buying in these emerging markets now requires upfront capital that’s increasingly hard to justify given the monthly outflow comparison.
