Rent or Buy(with) or Buy(without loan)

I have put across an excel sheet ( Thanks to CA Rachana Ranade), to make your decision to buy or rent a house. I have gone a step further to investigate if buying a house with 100% cash make sense

The verdict is clear — if you can fund 100% without taking a loan, go for buying else just rent the house. There is no point in taking more than 50% of the loan and making the bank rich.

So the implication of this finding is this — start early and plan well to accumulate a good amount of money if you plan to buy the house in the next 10 years.

People jumping to buy a house just because the interest rate is low does not make any sense — it's a long-term commitment and you are better off in a rented place than committing your EMI for 10 to 15 long years. You can start a SIP instead, in a good mutual fund, and enjoy life with all its glory and imperfections.

Look at the returns of living in a rented house and investing the remaining in a well-diversified fund — You will accumulate almost 2.5 to 3crores compared to 1.5 crores in case you decide to buy a house. There is nothing complex about these life decisions and you will realize this when everything is shown in black & white. Just that we are too busy to think in simple terms because we have evolved ourselves to think in a multi-dimensional direction to survive in this world.

Time to SIP your coffee and grab a book :)