Rent vs buy Pakistan 2026: October break-even at 11.5%

How to run the 11.5% break‑even test (Pakistan‑specific)

If you’re holding a rent renewal in one hand and a sale flyer in the other, start with quick Pakistan‑specific math you can do on your phone. As of October, use an 11.5% mortgage baseline, a 15–20 year tenor, and 20–30% down payment. A handy thumb rule at 11.5% for 20 years is this: for every Rs 1,000,000 you borrow, the EMI will be about Rs 11,000 per month.

Do this in three steps:

1) Get a clean rent and price for a like‑for‑like unit. - Pull 4–6 current listings for your exact block or society and note asking rent and asking sale prices. For apartments, match floor and tower if possible; for houses, match plot size and build age. Use your short‑list from properties for sale and properties for rent, and sense‑check against recent deal levels on sold prices where available.

2) Apply the price‑to‑rent multiple rule. - Multiply the annual market rent (monthly rent × 12). Then divide price by that annual rent. - At an 11.5% borrowing cost, if the multiple is roughly 16–18 years, renting usually wins once you add ownership costs and realistic price growth. If it’s 14–15x or lower, buying starts to look competitive. - Example: Price Rs 20,000,000; rent Rs 90,000 per month → annual rent Rs 1,080,000 → multiple ≈ 18.5x. That tilts toward renting at today’s rates.

3) Convert the purchase to a monthly cash flow and compare to rent. - EMI: Subtract your down payment from price. At 11.5% and 20 years, multiply the loan amount by ~1.1% to get the monthly EMI (that’s the Rs 11,000 per million rule). - Add ongoing costs: Budget 1–1.5% of property value per year for maintenance/society charges and wear‑and‑tear. On a Rs 22m home, that’s roughly Rs 18,000–28,000 per month. Add property tax (varies by city and unit size; expect a few thousand monthly on most mid‑tier homes). - Don’t forget one‑offs: Buyer‑side transfer costs (as of FY27, many urban transfers now land near 2–4% versus older ~4–6% stacks; verify your city’s latest schedule). If you expect to sell soon, include selling costs (agent commission often ~1%, plus seller‑side taxes) and spread them over the expected holding period. - Now compare: If your all‑in ownership monthly (EMI + upkeep + a monthly “amortization” of one‑off costs) is meaningfully higher than rent, the decision tilts toward renting—unless you have a strong reason to expect price growth or you value the non‑financial stability of owning.

You can sanity‑check your case with Sakunat’s rent vs buy calculator, run a bank‑style mortgage calculator on your exact loan, and model transfer levies with the stamp duty & tax calculator. If you’re exploring budgets, the affordability calculator keeps your down payment, EMI comfort and income aligned.

Two practical notes: - “Market rent” means the rent you can get in the next 30–45 days. If you need two months to find a tenant, your multiple gets worse; if you can sign a winter tenant quickly, it gets better. - Rates, DC values, and provincial notifications move. Treat the numbers here as “as of October” benchmarks and re‑check before you commit.

City break‑evens: Karachi, Lahore, Islamabad/Rawalpindi

Karachi (Gulshan‑e‑Iqbal 3‑bed apartment) - Price ≈ Rs 25,000,000. Market rent ≈ Rs 110,000/month. - 25% down (Rs 6,250,000), loan = Rs 18,750,000. - EMI at 11.5% (20 years) ≈ 18.75 × 11,000 = Rs 206,000/month. - Upkeep + tax allowance ≈ Rs 25,000/month. - All‑in monthly to own ≈ Rs 231,000 versus Rs 110,000 rent. - Price‑to‑rent multiple: 25,000,000 ÷ (110,000 × 12) ≈ 18.9x → leans renting unless you have a subsidized rate or you’re convinced of near‑term price upside in your specific tower/block.

What moves this in Karachi: - Buildings with higher HOA/sinking fund dues add to the ownership cost line. - Some Gulshan blocks with better maintenance or newish construction can rent at 120–130k; at Rs 25m/120k, multiple falls to ~17.4x—still rent‑tilted, but closer.

Lahore (5‑marla house in a mid‑tier society) - Price ≈ Rs 22,000,000. Rent ≈ Rs 95,000/month. - 25% down (Rs 5,500,000), loan = Rs 16,500,000. - EMI ≈ 16.5 × 11,000 = Rs 181,000/month. - Upkeep + tax ≈ Rs 22,000/month. - All‑in monthly to own ≈ Rs 203,000 versus Rs 95,000 rent. - Multiple: 22,000,000 ÷ (95,000 × 12) ≈ 19.3x → renting tends to win at 11.5% unless the unit is under‑rented or priced below market.

What moves this in Lahore: - If you find a motivated seller at Rs 20.5m with the same 95k rent, multiple drops to ~18.0x. Still rent‑tilted at today’s rate, but a smaller gap. - Some societies have very different maintenance realities. An older 5‑marla with deferred repairs can require more than 1–1.5%/yr in the first two years.

Islamabad/Rawalpindi (10‑marla, established sector) - Price ≈ Rs 45,000,000. Rent ≈ Rs 180,000/month. - 25% down (Rs 11,250,000), loan = Rs 33,750,000. - EMI ≈ 33.75 × 11,000 = Rs 371,000/month. - Upkeep + tax ≈ Rs 40,000/month. - All‑in monthly to own ≈ Rs 411,000 versus Rs 180,000 rent. - Multiple: 45,000,000 ÷ (180,000 × 12) ≈ 20.8x → renting is typically more economical at current rates.

What moves this in twin cities: - Corner and park‑facing premiums raise price but not rent proportionally, pushing multiples higher. - If you’re eying an “old but liveable” 10‑marla at Rs 40m with 175k rent, multiple ≈ 19.0x—still rent‑tilted at 11.5% but less extreme.

Want to ground your assumptions? Track broader direction using the property price index and test your block’s income yield with the rental yield calculator. For society‑specific transaction colour, a seasoned local can save you time—shortlist from find an agent or browse vetted real estate agencies.

City break‑evens: Faisalabad, Multan, Peshawar

Faisalabad (5‑marla) - Price ≈ Rs 14,000,000. Rent ≈ Rs 55,000/month. - 25% down (Rs 3,500,000), loan = Rs 10,500,000. - EMI ≈ 10.5 × 11,000 = Rs 116,000/month. - Upkeep + tax ≈ Rs 14,000/month. - All‑in monthly to own ≈ Rs 130,000 versus Rs 55,000 rent. - Multiple: 14,000,000 ÷ (55,000 × 12) ≈ 21.2x → renting usually wins.

But Faisalabad has pockets with stronger rents—yields closer to ~6%: - If you find Rs 14m price with Rs 70,000 rent, multiple ≈ 16.7x. That’s much nearer the 11.5% break‑even band. At that rent, your all‑in ~Rs 130k own vs Rs 70k rent is still a gap, but price growth expectations and a longer hold can tip you toward buying.

Multan (10‑marla) - Price ≈ Rs 18,000,000. Rent ≈ Rs 70,000/month. - 25% down (Rs 4,500,000), loan = Rs 13,500,000. - EMI ≈ 13.5 × 11,000 = Rs 149,000/month. - Upkeep + tax ≈ Rs 18,000/month. - All‑in monthly to own ≈ Rs 167,000 versus Rs 70,000 rent. - Multiple: 18,000,000 ÷ (70,000 × 12) ≈ 21.4x → rent tends to win unless you secure a below‑market purchase or concessional financing.

Peshawar (Hayatabad 10‑marla) - Price ≈ Rs 28,000,000. Rent ≈ Rs 115,000/month. - 25% down (Rs 7,000,000), loan = Rs 21,000,000. - EMI ≈ 21.0 × 11,000 = Rs 231,000/month. - Upkeep + tax ≈ Rs 28,000/month. - All‑in monthly to own ≈ Rs 259,000 versus Rs 115,000 rent. - Multiple: 28,000,000 ÷ (115,000 × 12) ≈ 20.3x → renting still cheaper at an 11.5% mortgage.

If you’re hunting these markets, line up comparables before you negotiate. Shortlist a few targets on properties for sale, cross‑check nearby closings on sold prices, then run each candidate through the mortgage calculator and stamp duty & tax calculator so you know your true monthly.

What FY27 transfer‑tax cuts do to your math

Two things happen when provinces lower buyer‑side levies (as several have signalled/implemented for FY27). First, your upfront friction to buy drops. Second, your “monthly equivalent” of those one‑off costs shrinks, nudging the break‑even toward buying—but only slightly versus the EMI.

• As of October, many urban transfers are trending around 2–4% total buyer charges versus older stacks closer to ~4–6%. This bundle can include stamp duty, CVT/ABL where applicable, registration, with the exact mix varying by province and property type. Always confirm the current notification and your city’s schedule before you wire a token.
• On a Rs 25,000,000 Karachi apartment, a 2% cut saves Rs 500,000 upfront. If you “amortize” that mentally over five years, that’s about Rs 8,300/month—small beside a ~Rs 206,000 EMI, but not nothing if you’re on the fence.
• Thinking of flipping within 2–3 years? The seller side also matters: budget seller taxes/withholding where applicable and an agent commission (often around 1%). Short holds still lean toward renting because transaction costs get spread over fewer months.

Before you decide, model the fees specific to your city and property type with our stamp duty & tax calculator. If you’re considering under‑construction, transfer costs and payment schedules differ—review the developer’s sheet on new projects & developments and verify what’s due at allotment vs possession.

The 5% Apna Ghar path: who benefits and by how much

Concessionary financing is the one lever that truly changes the rent‑vs‑buy outcome at today’s prices.

• EMI difference is large. At roughly 5% fixed for 20 years, the EMI is about Rs 6,600 per Rs 1,000,000 borrowed. The same Rs 18.75m loan that costs ~Rs 206,000 at 11.5% falls to ~Rs 124,000 at 5%—a saving of about Rs 82,000 per month.
• This flips some city cases toward neutral. Revisit Lahore’s Rs 22m/95k example with subsidized finance: EMI ~Rs 110,000, plus upkeep/tax ~Rs 22,000, plus a monthly allowance for transfer costs (say ~Rs 15,000 if you expect a multi‑year hold) = ~Rs 147,000 all‑in versus ~Rs 95,000 rent. Still higher, but close enough that personal preferences (school catchments, renovation control) and price growth expectations can justify buying. In buildings/societies with stronger rents—or if you negotiate a lower purchase price—you can cross the break‑even line.
• Availability and caps matter. “Apna Ghar”‑style subsidized options have historically come with income and unit‑price caps, bank participation limits, and finite government budgets. Don’t assume unlimited access or a long rate lock. Speak to participating lenders, confirm your eligibility, how long the rate is fixed, and what happens at reset.

Run your exact loan size and tenor on the mortgage calculator and compare scenarios (11.5% vs 5%). If you’re new to bank borrowing, our home financing primer walks through KIBOR‑linked pricing, fixed vs floating, and documentation checklists.

Avoid these mistakes before winter move‑ins

A few avoidable missteps can cost more than any calculator edge, especially if you’re aiming to settle before December.

- Forgetting KIBOR/reset risk Most mortgages in Pakistan float off KIBOR with periodic resets—often quarterly or semi‑annual. If your rate rises by 1–2 percentage points, your EMI can jump roughly 7–13%. On a Rs 16.5m loan with a Rs 181,000 EMI, a 200 bps bump could take that to around Rs 200,000–205,000. Stress‑test your budget at +200 bps before you sign. If a bank is offering a fixed‑for‑x‑years teaser, read the reset clause closely and ask how the margin over KIBOR is set.

- Underestimating ownership costs Set aside 1–1.5% of property value per year for maintenance and society dues—on Rs 18–28m homes, that’s ~Rs 18,000–28,000 per month. Apartments can trend lower on structural upkeep but higher on HOA‑type fees; older houses need more capex early (roofing, plumbing, paint). Add property tax (often billed annually; translate it to a monthly line in your comparison) and any DHA/society transfer, possession or membership fees. Planning a renovation? Price it honestly—use the construction cost calculator to avoid under‑budgeting.

- Ignoring rent negotiations and security deposits October–December is a thinner leasing season in many cities. Many landlords prefer a confirmed tenant over a long vacancy and will accept 5–10% lower rent for a strong profile or earlier move‑in. That lower rent pushes your price‑to‑rent multiple higher and can tilt you toward renting for another year. Standard deposits are often two to three months’ rent; negotiate caps on annual increases and clarify who pays for major repairs before you transfer the token.

A simple playbook for the next two evenings: 1) Shortlist three rentals and three for‑sale options in your exact target block with properties for rent and properties for sale. If you’re still deciding where to focus, skim the macro trend on the property price index and then drill into your micro market. 2) For each candidate, compute the annual rent and price‑to‑rent multiple. Throw those numbers into the rent vs buy calculator. For the buy options, price your loan on the mortgage calculator at 11.5% and again at a +200 bps stress. Add 1–1.5%/yr upkeep and a realistic property tax line. 3) Price your transfer costs using the stamp duty & tax calculator and spread them over the minimum period you’ll hold. If you’re on the fence, model a 5‑year and a 10‑year horizon and see how the per‑month picture changes. 4) Gut‑check your assumptions: are your rents realistic for a 30–45 day lease‑up? If not, adjust. If you need help with block‑level comparables or negotiating tactics, line up two conversations with pros via find an agent—then pick the one who brings recent, specific deal data, not just opinions.

If the math says rent this winter, that’s a financially tidy choice at an 11.5% mortgage baseline. Use the breathing room to strengthen your down payment, watch for any policy or KIBOR shifts, and keep a living spreadsheet of target streets. If the math is close or you qualify for subsidized financing, move decisively: lock your bank terms in writing, verify the latest provincial notifications on transfer levies, and insist on clean title and society NOCs before you transfer a single rupee.