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Renting vs Buying a Home: Which is Better?

  • Highlights

  • Consider your income and expenses

  • Understand the nature of your job

  • Analyse your need to customise your home

  • See which home loan you qualify for

Your home doesn’t just give you a space that you can call your own, but also a sense of security. Planning home purchase depends on various factors like your income, your future plans, the home loan you qualify for, and the real estate market. So, base your decision on practical factors and then see if it is more prudent for you to buy a home or to rent one in the near future. Here’s how you can decide.

1. Your financial standing and the market conditions

Purchasing a home is a big decision that requires an immense amount of financial planning. You need to organise funds to repay the home loan, pay the down payment and finance related expenses like stamp duty, registration and your broker’s fee. However, when getting a home on rent you have no such hassles apart from brokerage and cost of creating a legal agreement, and of course, your rent. So, you can consider buying a home if you have the money necessary for purchase. Secondly, if the real estate prices are high, buying could prove to be more expensive.

High real estate costs also affect all related expenses. So, study the market and buy a home only when you can afford it.

2. Your foreseeable duration of stay

There is no sense purchasing a home when you foresee living in it only for a year or two; in such a case, renting is better for you. So, before you make a decision, spend some time thinking how long you are planning to stay in that particular city or location. If your profession or family plans support your decision of living in the same place for the probable future, you can go in for home purchase.

Additional Read: Home Loan Tax Benefit

3. The nature of your occupation

Some professions require you to travel from city to city or country to country. If your occupation is such that requires you to be on the go, rental accommodations would be more sensible. However, if your occupation is stable and doesn’t involve too much travel, you could think of buying a home.

4. Your need for freedom

There is much more freedom and choice available to you when it comes to purchasing a home of your own. For example, you can choose the kind of home you want, get the facilities you’d like close to you, and build or choose the kind of interiors and exteriors tailored for your family and yourself that you cannot always access in a rented property. In the latter, you will often need to compromise on one aspect or another and have limited freedom to make your own choices. If you have certain lifestyle requirements that you don’t want to forego, buying is the best choice for you.

Additional Read: Check Your PMAY Eligibility Here

5. The type of home loan you qualify for

Much of this decision may also depend on the type of the home loan that you qualify for. You can easily find this out by using a home loan eligibility calculator to see if you are eligible for a loan with your current income and the amount you are likely to get. Next, check if you can afford a home loan by measuring the EMIs using a home loan EMI calculator. Be sure to check the other facilities or advantages offered by lenders to see if you can reduce your EMI obligation. For example, women applicants can get a lower home loan interest rate from most lenders today. You can also choose a Flexi Hybrid Home Loan from lenders such as Bajaj Finserv, which allows you to pay only interest as EMIs for the first few years of your tenor. Once your income increases with time, you can pay Full EMIs and pay off your home loan with ease. Checking these aspects can help you decide if you are ready to be a homeowner.


Based on the five factors, you can make a decision whether to buy a home or work towards financing homeownership by continuing to rent a home for a few years. When the time is right for you, consider a Home Loan with Bajaj Finserv to buy the home of your choice at a nominal rate of interest.

Bajaj Finserv brings you pre-approved offers for personal loans, home loan, business loans and a host of other financial products. Not only does this simplify the process of availing financing, but also helps you save on time. All you have to do is share a few basic details and check out your pre-approved offer.
Need instant financing? Think it. Done with Bajaj Finserv.

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The material contained in this site and on associated web pages is general information and it is not intended to be advice on any particular matter. Subscribers and users should seek professional advice before acting on the basis of the information contained herein. The decision with respect to any financial product or opportunity or nature or suitability or choice or the viability of any product or service shall always be sole responsibility and decision of the subscriber and user.

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