Buying a house Vs Renting it: CA questions home ownership logic in urban India when 'banks have rebranded liability as a dream'

In India’s big cities, the idea of owning a home is still treated like a major life goal. But this long-held belief is now being questioned more openly, especially when it comes to the financial logic behind it. Chartered Accountant Nitin Kaushik recently shared a post on X (formerly Twitter), where he broke down why buying a house in urban India may not always be the wealth-building move people assume it is.

He pointed out that for many urban households, the decision is less about returns and more about emotional security, even if the numbers don’t really support it.

The numbers that challenge the “dream”

Kaushik’s post starts with a direct observation on how home ownership plays out financially in cities like Mumbai and Bengaluru. He writes, “Buying a house in urban India today is one of the most expensive ways to feel settled while actually staying financially stagnant.”


He also highlights the gap between rental returns and loan costs in metro cities. According to him, “In cities like Mumbai or Bengaluru, rental yields are stuck at 2.5% to 3%, while home loan interest rates are often above 8.5%.”

That gap, he suggests, quietly eats into long-term wealth creation for many buyers who enter the market thinking it is a safe investment.

Hidden costs and long recovery periods

Beyond just EMIs and interest rates, Kaushik also draws attention to upfront costs that often get ignored during purchase decisions. He notes, “Add to that a 6% spread, along with 5% to 7% lost upfront in stamp duty and registration, and you’re starting your investment in a deep hole that can take years to recover from.”

The argument here is simple: the entry cost itself puts buyers at a disadvantage before the asset even starts appreciating.

One of the sharper points in his post is about how home loans are marketed. He writes, “Banks have successfully rebranded a 20-year liability as a dream, but the math tells a different story.”

This reflects a broader concern that long-term EMIs are often presented as wealth creation, even when they function more like extended financial commitments with limited liquidity.

Renting vs buying: A different way to look at money flow

Kaushik also compares renting with investing the difference in cash flow. He explains, “Renting a 2BHK for ₹40,000 and investing the ₹70,000 EMI difference into a diversified portfolio is often a more effective way to build liquid wealth in the current market.”

The idea is not that buying is always wrong, but that renting may allow more flexibility and faster capital growth depending on market conditions.

He does not completely dismiss home ownership either. Instead, he puts a condition on it. As he writes, “Ownership only makes sense when the asset grows faster than your cost of capital and right now, the bank is leading that race.”

His argument seems to be less about rejecting home ownership and more about questioning whether the financial math still supports it in today’s urban India.