East Bengaluru buyer answers
Rent vs buy in Bengaluru: how should you work it out?
Direct answer: For rent vs buy in Bengaluru, compare a year's rent with a year's unrecoverable cost of owning: loan interest, maintenance, tax and the return your down payment could have earned. Add the one-time 7.6% stamp and registration charges. Buying wins if you'll stay long enough for price growth to cover the gap.
Disclosure: acre&key’s advice is free to buyers.
Verify with your CA and lawyer: This page shows a way to compare renting and buying, with example numbers only. It isn't tax, investment or legal advice. Your lender's loan schedule sets the interest, and your CA should check any tax effect before you count it.
Key takeaways
- Compare unrecoverable costs, not EMI against rent. The principal part of an EMI is savings, not cost.
- One-time charges are about 7.6% of the price on a resale or above-₹45-lakh flat, and you can't get them back.
- In our example, owning costs about ₹4.5 lakh more than renting in year one, so the flat must grow about 4.5% a year just to keep pace.
- Your stay horizon decides most cases. Short stays favour renting.
What should you compare?
Not your EMI against your rent. Part of every EMI repays principal, which stays yours. The fair comparison is rent against the costs of owning that you never get back:
| Owning cost you don't get back | Where the number comes from |
|---|---|
| Interest on the home loan | Your loan schedule; our EMI calculator shows it |
| Return lost on your down payment and charges | What that money would earn elsewhere. The same trade-off is in whether to prepay your home loan or invest the surplus. |
| Maintenance and property tax | The association's bill and your tax notice |
| Stamp duty and registration, once | About 7.6% in GBA areas: 5% duty, 10% cess and 2% surcharge on the duty, and a 2% registration fee |
The 7.6% figure applies to a resale flat or a new one above ₹45 lakh in GBA areas; first sales at or below ₹45 lakh pay less. Check yours with the stamp duty calculator. For the rest of what a flat costs on top of the price, including GST on a new flat, see what you pay beyond the base price.
Worked example 1: year one, side by side
Illustrative inputs, not market figures: a ₹1 crore resale flat, 20% down (see how much down payment RBI's loan-to-value limits require), an ₹80 lakh loan at 8.5% over 20 years, rent of ₹35,000 a month for a similar flat, and 7% a year as the return your cash could earn elsewhere.
| Item | Maths | Year one |
|---|---|---|
| EMI | ₹80 L at 8.5%, 240 months | ₹69,426 a month |
| Interest paid in year one | From the loan schedule | ₹6,73,892 |
| Principal repaid in year one | Yours, so not a cost | ₹1,59,218 |
| Upfront cash | ₹20 L down + ₹7.6 L charges | ₹27,60,000 |
| Return lost on that cash | ₹27.6 L × 7% | ₹1,93,200 |
| Unrecoverable owning cost | Interest + lost return | ₹8,67,092 |
| Rent | ₹35,000 × 12 | ₹4,20,000 |
| Gap | ₹4,47,092 |
Before maintenance and property tax, owning costs about ₹4.47 lakh more than renting in year one. That's 4.47% of the price. So the flat has to rise about that much each year just to break even, before you count the ₹7.6 lakh of charges.
Worked example 2: how long do you need to stay?
Same flat. Over five years, a rough version keeps the year-one gap flat, ignoring that interest falls and rent rises:
| Item | Amount |
|---|---|
| Five years of gap: ₹4.47 L × 5 | about ₹22.4 L |
| One-time charges | ₹7.6 L |
| Total buying must recover | about ₹30 L |
| Growth needed on ₹1 crore | about 30% in five years, roughly 5.4% a year |
That's achievable in some areas and not others. Knight Frank's H1 2026 report shows flat prices up about 20% year on year in KR Puram but about 3% on Sarjapur Road (Knight Frank India, market report). Past growth is no promise either way.
The three-number test (our framework)
- Rent yield. Annual rent ÷ price. Here ₹4.2 L ÷ ₹1 crore is 4.2%. If that's well below your loan rate (8.5% here), renting is cheaper year to year.
- Growth needed. The yearly gap as a share of the price, here about 4.5%. Ask honestly whether the area can deliver it.
- Stay horizon. How many years until the one-time charges stop mattering. Under five years, renting usually wins on numbers alone.
The numbers aren't everything. Security of tenure, school stability and a home you can change all count. Just know what they're costing you.
Checklist before you decide
- Rent for the same flat type in the same area, from real listings
- Loan rate and tenure from your lender's offer
- Interest for year one from the loan schedule
- Stamp and registration charges for that price
- Maintenance and property tax
- What your down payment earns now
- How many years you expect to stay
- Total upfront budget from the total cost calculator
You can also run your own figures through our rent vs buy calculator.
Frequently asked questions
Is it better to rent or buy in Bengaluru?
It depends on your numbers and how long you'll stay. Compare a year's rent with a year's loan interest, maintenance, tax and the return lost on your down payment, then add the one-time 7.6% charges. If you'll stay many years in an area with steady price growth, buying can win.
Should I compare my EMI with my rent?
No. Part of every EMI repays principal, which you keep as equity. Compare rent with the costs you never get back: interest, maintenance, property tax, lost return on your cash, and the stamp and registration charges.
What is the rent yield in Bengaluru?
It varies by flat and area, and we don't have an official citywide figure. Work it out yourself: annual rent divided by the price. A ₹35,000 monthly rent on a ₹1 crore flat is a 4.2% gross yield, below a typical home loan rate.
How much price growth does buying need to beat renting?
In our example, about 4.5% a year just to cover the year-one gap between owning costs and rent, plus enough to recover 7.6% in one-time charges. Over five years that came to roughly 30% in total. Your own figures will differ.
Does the tax benefit on a home loan change the answer?
It can narrow the gap if you're in the old tax regime and claim interest and principal deductions. Under the default new regime, those deductions for a self-occupied home generally aren't available. Ask a CA to run it for your income before relying on it.
How long should I stay to make buying worth it?
Long enough for price growth to recover the one-time charges and the yearly gap. In our example, five years needed about 5.4% growth a year. Shorter stays usually favour renting on numbers alone.
Talk it through with acre&key
If you'd like help running your own rent vs buy numbers, book a consultation with acre&key.
CA note: Tax treatment of home loan interest and principal depends on your regime and income. Check with a chartered accountant before counting tax savings.
References
Checked 19 Oct 2026.
- Karnataka Stamp Act 1957 (stamp duty; surcharge on duty under the Greater Bengaluru Governance Act 2024, s.170): https://dpal.karnataka.gov.in/storage/pdf-files/34%20of%201957%28E%29.pdf, accessed 19 Oct 2026
- acre&key home loan EMI calculator (₹80 L, 8.5%, 20 years = ₹69,426): https://acrenkey.com/calculators/home-loan-emi-calculator/, accessed 19 Oct 2026
- Knight Frank India, India Real Estate: Office and Residential Market H1 2026 (market report): https://content.knightfrank.com/research/3116/documents/en/india-real-estate-office-and-residential-market-h1-2026-12927.pdf, accessed 19 Oct 2026