the two numbers the dead money line skips

A friend told me over the weekend that renting is throwing money away. He wants to buy a flat. Fair instinct, most of us grew up hearing it.

So I pulled the actual numbers on a one crore apartment.

Here is the part that stops the argument. In the first year of a home loan, more than eighty paise of every EMI rupee is interest. Not equity you own. Interest, paid to the bank, gone the same way rent is gone. The buyer is throwing money away too, at least early on. Just to a different landlord.

Now the comparison people skip. You can rent a metro flat for roughly 3.5 percent of its price a year. Borrowing to buy the same flat costs about 8.5 percent. That five point gap is the running cost of owning, before maintenance, before property tax, before the eight percent in stamp duty and paperwork you pay just to walk in the door.

And the down payment. Twenty lakh, sitting in walls instead of the market. That same twenty lakh, invested at eleven percent, is about 1.6 crore in twenty years. That is the number nobody writes on the brochure.

This is not me telling you to rent. If the flat compounds faster than your portfolio, buying wins outright. And a home buys things a spreadsheet cannot price. A place you control. A forced savings plan you cannot skip. A hedge against rent that keeps climbing.

The honest version is that both cost something. Rent buys flexibility and a portfolio that stays liquid. A home buys certainty and equity you are forced to build. The mistake is calling either one free.

It turns on three levers: how long you will stay, the gap between yield and loan rate, and what the down payment would earn elsewhere. Run your own number before the EMI runs it for you