Buying locks in more than an EMI. The rate on that EMI tracks RBI's repo rate through a rule that took effect in 2019, RBI itself caps how much of the property's cost a bank may lend against, RERA caps what a promoter can collect before you have signed an agreement, and the state charges on entry vary enough that the same purchase price can demand 8% in Kerala of stamp duty alone and a schedule in Uttar Pradesh that states no ad-valorem percentage or women's concession at all in its own base document. None of that shows up in a rent-versus-EMI comparison unless you go looking for it.
The EMI side: why the rate you enter is not a fixed number
Since 1 October 2019, RBI has required banks to link every new floating-rate retail loan — including housing loans — to an external benchmark such as the repo rate, with the lender setting its own spread on top and changing it only when the benchmark itself moves (RBI press release, 4 September 2019). That is the mechanism, not a guess: your bank cannot reprice a floating home loan on its own judgement of creditworthiness once it is running, only when the benchmark changes. The benchmark itself was confirmed unchanged at 5.25% across the Monetary Policy Committee's February, April and June 2026 meetings (RBI MPC resolutions), reviewed roughly every two months — the EMI figure you put into the calculator above is a snapshot, not a fixed input for a 20-year comparison. And if you later want to refinance or close the loan early, floating-rate loans to individuals for non-business purposes carry no pre-payment or foreclosure charge under RBI's separate 2025 Directions (RBI, Pre-payment Charges on Loans Directions, 2025), for loans sanctioned or renewed on or after 1 January 2026 — a real asymmetry against renting, which carries no exit cost of its own.
How much of the price the bank can actually finance
The down payment in the calculator is not a number you can shrink indefinitely by shopping lenders — RBI's Master Circular on Housing Finance sets loan-to-value ceilings that every scheduled commercial bank must observe: up to 90% for a loan up to ₹30 lakh, up to 80% for a loan above ₹30 lakh and up to ₹75 lakh, and up to 75% above ₹75 lakh. The circular also states that banks must exclude stamp duty, registration and documentation charges from the property cost used for that LTV calculation — with one exception: where the house costs ₹10 lakh or less, a bank may add those charges into the cost for the LTV figure. Above that line, you fund stamp duty and registration entirely outside the loan, on top of whatever down payment the LTV slab requires.
What buying carries that renting doesn't: RERA's escrow rule and the 10% advance cap
The central RERA Act, in the text mirrored by UP-RERA's own gazette copy, bars a promoter from accepting more than 10% of the apartment's cost as an advance or application fee before you have signed a registered agreement for sale (Section 13(1)) — a booking amount above that is not lawful under the Act. It also requires 70% of everything collected from allottees to sit in a separate escrow account used only for that project's construction and land cost, released only in proportion to certified completion (Section 4(2)(l)(D)). If the promoter still fails to hand over possession on time, an allottee who wants to stay in the deal is entitled to monthly interest for every month of delay, at the rate the state's own rules set (Section 18(1)); Telangana, Karnataka and Maharashtra's state RERA rules all fix that rate at the same formula — the State Bank of India's highest Marginal Cost of Lending Rate plus two per cent (Telangana Rules, 2017; Karnataka Rules, 2017; Maharashtra Rules, 2017). None of this has a rent-side equivalent, because none of it applies to a rented flat.
Small projects are exempt from RERA registration entirely
The same Act carves out an exception worth checking before you assume the protections above apply: a project does not need RERA registration at all where the land being developed does not exceed 500 square metres, or where the number of apartments does not exceed eight, inclusive of all phases (Section 3(2)(a), same UP-RERA text). A small independent builder's four-flat building can legally sell to you with none of the escrow, advance-cap or delay-interest machinery above attached to it — worth asking about directly rather than assuming RERA covers every purchase.
The tax side of the EMI depends on which regime you are actually in
Under the old tax regime, the Income Tax Department's AY 2026-27 guidance caps the Section 24(b) home-loan interest deduction at ₹2,00,000 a year for a self-occupied property, plus a separate ₹1,50,000 combined Section 80C limit covering principal repayment (incometax.gov.in). Under the new, default regime, the department's own regime-comparison FAQ states that Section 24(b) self-occupied interest is not allowed as a deduction at all, and that Chapter VI-A deductions — including Section 80C — cannot be claimed (incometax.gov.in). A rent-vs-buy comparison that assumes the EMI carries a tax shield is silently assuming the old regime — check which one actually applies to you on the home loan tax benefit calculator before crediting that shield to the buy side. Separately, Section 80EEA offered an additional ₹1,50,000 interest deduction for first-time buyers, but only for loans sanctioned between 1 April 2019 and 31 March 2022 (incometax.gov.in) — that window is closed, and a new loan today does not qualify for it however the arithmetic elsewhere looks.
PMAY-U 2.0: the one subsidy still open, and what it is actually worth
For a household with annual income up to ₹9 lakh, PMAY-U 2.0's Interest Subsidy Scheme applies to loans up to ₹25 lakh on a property valued up to ₹35 lakh, with a 4% subsidy on the first ₹8 lakh of the loan for up to 12 years of tenure — capped at a maximum releasable subsidy of ₹1.80 lakh, with a maximum net present value of ₹1.50 lakh at an 8.5% discount rate, for loans sanctioned and disbursed on or after 1 September 2024 (PMAY-U 2.0 Interest Subsidy Scheme, pmaymis.gov.in). That is a materially different, and smaller-ceilinged, scheme from the older CLSS subsidy some calculators still quote — check the income and property-value ceilings against your own purchase before assuming it applies.
The entry cost that renting never pays, and how much it varies by state
Kerala's own ready-reference schedule sets conveyance duty at a flat 8% of the property's fair value or consideration, whichever is higher, plus a 2% registration fee — the same 8%/2% figures for panchayat, municipal and corporation areas alike (Kerala Registration Department). A flat or apartment conveyed within six months of the local body allotting the house number gets a lower concessional rate — raised from 5% to 7% by a state government order effective 1 April 2023 (Kerala G.O.(P) No.41/2023/TAXES). Uttar Pradesh's own published schedule, by contrast, states only base rupee slabs for a conveyance deed and explicitly defers the actual percentage rate to a separate reduction notification not published on the same portal — and a full-text search of that schedule for any women's-concession wording or rupee ceiling returns nothing at all (UP Stamp and Registration Department). The point for a rent-vs-buy comparison is not which state is cheaper — it is that this line item is not a percentage you can safely assume; work it out for your own state on the stamp duty comparison tool before it goes into the calculator above as a one-off cost renting never pays.
Methodology
Loan-rate and LTV mechanics are read from RBI's own circulars and press releases; RERA protections from the central Act (mirrored on a state RERA authority's own PDF) and three states' own gazetted Rules; tax figures from the Income Tax Department's AY 2026-27 portal; the PMAY-U 2.0 figures from the scheme's own official MIS portal; stamp duty figures from Kerala's and Uttar Pradesh's own state registration departments. None of these figures is a national average, and none is converted from a non-Indian source.
Sources
- RBI — Press Release, floating-rate loans linked to external benchmark — accessed 2026-09-21
- RBI — Monetary Policy Committee Resolution (2026 meetings) — accessed 2026-09-21
- RBI — Pre-payment Charges on Loans Directions, 2025 — accessed 2026-09-21
- UP-RERA — The Real Estate (Regulation and Development) Act, 2016 (full text) — accessed 2026-09-21
- Government of Telangana — Real Estate (Regulation and Development) Rules, 2017 — accessed 2026-09-21
- Government of Karnataka — Real Estate (Regulation and Development) Rules, 2017 — accessed 2026-09-21
- Government of Maharashtra — RERA Registration Rules, 2017 — accessed 2026-09-21
- Income Tax Department — Salaried Individuals, AY 2026-27 — accessed 2026-09-21
- Income Tax Department — New vs Old Tax Regime FAQs — accessed 2026-09-21
- Income Tax Department — Individual having Income from Business/Profession, AY 2026-27 — accessed 2026-09-21
- MoHUA — PMAY-U 2.0 Interest Subsidy Scheme — accessed 2026-09-21
- Kerala Registration Department — Existing Rates of Stamp Duty and Registration Fees — accessed 2026-09-21
- Government of Kerala — G.O.(P) No.41/2023/TAXES (flat/apartment stamp duty concession) — accessed 2026-09-21
- UP Stamp and Registration Department — Indian Stamp Act Schedule 1-B — accessed 2026-09-21
- RBI — Master Circular – Housing Finance (February 2022) — accessed 2026-09-21