Buy a Flat or Keep Renting in Dhaka? Two Families, Two Answers

Two families. Same savings, same city, same type of flat. One signs a deed and takes a 20-year home loan. The other renews the rent agreement and invests the money instead. Both did the maths, and both were right, for their own lives. This is the long version of how they got there, with every number laid out so you can do the same.

In Dhaka, owning a flat is more than a money question. For many families it means security, status, something to leave the children, and freedom from a landlord who can raise the rent or ask you to leave. Parents ask “when are you buying?” long before anyone asks whether it makes financial sense.

But prices have climbed fast, home loans are expensive, and rents, though rising, are still low compared with what flats cost. That combination makes the decision harder than it was for our parents’ generation. This guide goes through it step by step: what a flat really costs, how home loans work today, what renting really costs, and then a full comparison over 5, 10 and 20 years on one realistic flat.

The two families in this article are illustrative composites, built from common situations we see among middle-class Dhaka households. They are not real people, and the numbers are our worked examples, clearly labelled. The market figures they rest on come from published reports.

Why this question is so hard in Dhaka right now

Three things have changed in the last few years.

Flat prices jumped, especially near the metro. In early 2025, The Business Standard reported that flats in Mirpur which sold for Tk 5,500 to 7,000 per square foot three years earlier were selling for Tk 10,000 to 13,000, and that prices in Mirpur and Uttara had risen nearly 25% in a single year as the metro line drew buyers. A buyer with Tk 60 lakh found nothing under Tk 1 crore in Mirpur.

Families are buying smaller. By August 2026, the Daily Observer reported that flats of 500 to 800 square feet were becoming a necessity rather than a choice for many middle-class buyers and young couples.

Rents are rising too, but more slowly than prices. Bangladesh Bureau of Statistics data show house rents rose about 27% between July 2022 and July 2026, according to Prothom Alo, which also found that real rises on the ground were often steeper. Even so, a flat that costs Tk 1.3 crore to buy might rent for Tk 30,000 a month. That gap is the heart of this whole debate, and we come back to it again and again.

What a flat really costs to buy

The price per square foot, by area

Location decides almost everything. These are the ranges the Daily Observer reported in August 2026.

Area	Price per sq ft (Tk)	A 1,000 sq ft flat would cost roughly (Tk)
Aftabnagar	5,000 to 7,500	50 lakh to 75 lakh
Banasree	5,500 to 8,000	55 lakh to 80 lakh
Mirpur, Mohammadpur, Adabor, Uttara	8,000 to 12,000	80 lakh to 1.2 crore
Rampura, Khilgaon	9,000 to 13,000	90 lakh to 1.3 crore
Dhanmondi	12,000 to 18,000	1.2 crore to 1.8 crore
Farmgate, Monipuripara	14,000 to 20,000	1.4 crore to 2 crore
Gulshan	15,000 to 36,000 or more	1.5 crore to 3.6 crore or more

Per sq ft ranges from the Daily Observer, August 2026. The 1,000 sq ft column is our simple multiplication; actual prices depend on the building, floor, developer and facilities.

The costs on top of the price

The sticker price is never the full bill. When you register a flat, you pay a set of government charges. One developer’s buyer guide lists stamp duty of about 1.5%, a registration fee of about 1% and local government tax of about 2%. On top of these come a source tax (often called gain tax) that depends on the area and size, and VAT on flats bought from developers, which also varies by size. Rates change with budgets, so always confirm the current figures before you plan.

Then there are the costs nobody puts in the brochure:

• Car parking, often sold separately for several lakh taka.
• Utility connection charges for gas, electricity and water, sometimes billed at handover.
• Interior work: kitchen cabinets, wardrobes, lights, fans, curtains, an AC or two.
• A deposit to the owners’ association or a reserve fund for the building.
• Lawyer’s fees for checking documents, which are worth every taka.

In our example below, we budget 8% of the price for registration and taxes and a further Tk 5 lakh for extras. Both are our estimates for a mid-range Mirpur flat. Your figure may be higher, especially if parking is extra.

How home loans work in 2026

Most buyers need a loan. Here is how the rules stand, as reported by Prothom Alo in January 2026:

• Loan cap: Banks with a default rate below 5% can lend up to Tk 4 crore; those with 5% to 10% defaults up to Tk 3 crore; others up to Tk 2 crore.
• Down payment: The usual ratio is 70:30. The bank lends up to 70%, and you pay 30% yourself. For a Tk 1 crore flat, that means Tk 30 lakh from your own pocket.
• Tenure: Generally 5 to 20 years, sometimes more.
• Eligibility: Minimum age 22, and the loan must end before you turn 65. Salaried applicants need at least Tk 25,000 a month in income.

The interest rate is the big one. TBS reported that home loan rates rose from about 9% to 14% in two years as Bangladesh Bank tightened policy. Bangladesh Bank cut its policy rate to 9.5% in August 2026, which may bring loan rates down slowly, but for now double-digit home loan rates are normal. We use 13% in our example.

Here is how much the rate changes your monthly payment on a Tk 92.4 lakh loan over 20 years, the loan in our example:

Interest rate	Monthly EMI (Tk)	Total interest over 20 years (Tk)
10%	89,168	1.22 crore
11%	95,374	1.36 crore
13%	1,08,254	1.67 crore
14%	1,14,901	1.83 crore

Our calculation, standard reducing-balance EMI. Actual loans may have processing fees, insurance and variable rates.

Read that last column again. At 13%, you pay Tk 1.67 crore in interest to borrow Tk 92 lakh. Over the life of the loan, the bank earns more than the flat’s original loan amount. That is not a reason never to borrow, but it is the single most important number in this decision. Before signing, read the loan offer carefully; our guide on reading the fine print on a loan covers processing fees, early settlement charges and variable rates, and most of it applies to home loans too.

What renting really costs

In Prothom Alo’s October 2026 survey of nine Dhaka areas, including Mirpur, Mohammadpur, Banasree and Bashundhara, three-room flats rented for Tk 18,000 to Tk 50,000 a month, plus a service charge of Tk 3,000 to Tk 7,000. Two-room flats in parts of Mohammadpur went for Tk 10,000 to Tk 15,000.

The real costs of renting are:

• Monthly rent, which usually rises every year or two.
• Advance paid to the landlord, which you get back when you leave if all goes well.
• Moving costs every time you shift: trucks, labour, repainting, new curtains, broken furniture.
• Uncertainty: a landlord may raise the rent sharply or ask you to leave when a relative needs the flat.

Note that the service charge, utility bills and building maintenance fee are paid by whoever lives in the flat, owner or tenant. So when comparing, we leave those out on both sides.

For a broader picture of how rent fits into a household budget, see our breakdown of what a family of four actually spends in Dhaka each month.

The key number most people never calculate: rental yield

Rental yield is the year’s rent divided by the flat’s price. It tells you how much “use” of a flat you get per taka of its value.

Take a 1,200 sq ft flat in Mirpur at Tk 11,000 per sq ft. It costs Tk 1.32 crore. A similar flat might rent for about Tk 30,000 a month (our estimate, within the range Prothom Alo found). That is Tk 3.6 lakh a year.

Tk 3.6 lakh ÷ Tk 1.32 crore = 2.7% a year.

Compare that with the alternatives:

• A home loan costs around 13% a year.
• A one-year FDR pays around 7% after tax, as we worked out in why your FDR interest is lower than you think.

In simple words: renting the flat costs you 2.7% of its value each year, while borrowing to buy it costs you 13% on the borrowed part, and tying up your own savings in it means giving up around 7%. Unless the flat’s price rises fast enough to close that gap, renting is cheaper year by year. This is the single most important idea in this article.

One flat, two ways: the upfront cost

Let us put real numbers on the same Tk 1.32 crore, 1,200 sq ft Mirpur flat.

Item	Buy (Tk)	Rent (Tk)
Flat price	1,32,00,000	–
Down payment (30%)	39,60,000	–
Registration, taxes, VAT (our 8% estimate)	10,56,000	–
Parking, connections, interior (our estimate)	5,00,000	–
Advance to landlord (refundable)	–	about 60,000
Cash needed on day one	55,16,000	about 60,000
Home loan	92,40,000	–

So both families start with the same Tk 55 lakh in savings. The buyer puts all of it into the flat. The renter keeps it and invests it.

One flat, two ways: the first year

Not all of an EMI is a cost. Part of it repays the loan, which builds your ownership. The real cost of owning is the money that is gone for good: interest, repairs, and the return you give up on your own savings. Here is year one.

First-year cost	Buyer (Tk)	Renter (Tk)
EMI paid (12 × 1,08,254)	12,99,048	–
…of which loan interest (gone)	11,95,154	–
…of which principal (builds ownership)	1,03,889	–
Repairs and upkeep, 0.5% of value (our estimate)	66,000	–
Return given up on Tk 55 lakh at 7%	3,86,120	–
Rent (12 × 30,000)	–	3,60,000
Money gone for good in year one	about 16,47,000	3,60,000
Per month	about 1,37,000	30,000

Our calculation. Service charge and utilities are paid by both and left out.

This shocks most people. In the first year, the buyer “loses” about Tk 1.37 lakh a month in interest, upkeep and missed returns, against the renter’s Tk 30,000. Only about Tk 8,700 a month of the EMI actually reduces the loan in year one. Early in a long home loan, almost the entire EMI is interest.

So why would anyone buy? Because the flat itself may rise in value, rent will keep rising, and the loan payment stays fixed while the rent does not. To see whether that makes up the gap, we need to look further ahead.

The long run: 5, 10 and 20 years

Here are our assumptions, all stated so you can change them:

• Home loan at 13% for 20 years; EMI fixed at Tk 1,08,254.
• Rent starts at Tk 30,000 and rises 6% a year, roughly in line with the BBS rent index over the past four years.
• The renter’s investments earn 7% a year after tax, similar to an FDR.
• Flat prices grow at 3%, 5% or 7% a year, three scenarios, because nobody knows the future.
• We look at two kinds of renter. The disciplined renter invests the Tk 55 lakh and every month invests the difference between what the buyer pays (EMI plus upkeep) and the rent. The ordinary renter invests the Tk 55 lakh but spends the monthly difference.

After 20 years

Scenario	Buyer owns (Tk)	Disciplined renter has (Tk)	Ordinary renter has (Tk)
Flat prices grow 3% a year	2.38 crore	5.64 crore	2.13 crore
Flat prices grow 5% a year	3.50 crore	5.64 crore	2.13 crore
Flat prices grow 7% a year	5.11 crore	5.64 crore	2.13 crore

Our calculation. The buyer’s figure is the flat’s value with the loan fully repaid. Renters’ figures are investment balances. By year 20, rent in this model has reached about Tk 96,000 a month.

After 10 years

Scenario	Buyer’s equity (Tk)	Disciplined renter (Tk)	Ordinary renter (Tk)
Flat prices grow 3% a year	1.05 crore	2.42 crore	1.09 crore
Flat prices grow 5% a year	1.43 crore	2.42 crore	1.09 crore
Flat prices grow 7% a year	1.87 crore	2.42 crore	1.09 crore

Buyer’s equity is the flat’s value minus the Tk 72.5 lakh still owed on the loan after 10 years. Selling would also cost several lakh taka in fees and taxes, which we have not subtracted.

After 5 years

Scenario	Buyer’s equity (Tk)	Disciplined renter (Tk)	Ordinary renter (Tk)
Flat prices grow 3% a year	67 lakh	1.36 crore	77 lakh
Flat prices grow 5% a year	83 lakh	1.36 crore	77 lakh
Flat prices grow 7% a year	1.00 crore	1.36 crore	77 lakh

After 5 years, Tk 85.6 lakh of the loan is still outstanding. Most early EMI went to interest.

What the tables tell us

1. On pure maths, a disciplined renter usually ends up richer. With rental yields under 3% and loan rates around 13%, renting and investing the difference beats buying in every scenario we tested, even if flat prices grow 7% a year for 20 years.
2. But most renters are not that disciplined. To match the buyer, the renter must invest around Tk 78,000 every month in year one, and keep doing it for 20 years. Very few households actually do this. The money tends to go on a bigger car, holidays, school fees or helping relatives.
3. Against an ordinary renter, buying wins over the long run if flat prices rise at 3% a year or more. The EMI works as forced savings: you cannot skip it, so you build wealth whether you feel like it or not.
4. Buying is a bad idea for short stays. After five years, the buyer has barely more equity than the ordinary renter’s savings, and selling costs would wipe that out. If you might move within five to seven years, renting is almost always better.
5. The interest rate matters enormously. At 10% instead of 13%, the EMI falls by about Tk 19,000 a month and buying looks much better. If rates come down in the coming years, refinancing could change the picture.

Family one: why the Hossains bought

Shirin and Faisal (an illustrative composite family) are in their late thirties with two children in a school near Mirpur 10. Faisal works at a bank; Shirin teaches at a private university. Together they take home about Tk 2.5 lakh a month. Over twelve years they have saved Tk 55 lakh, partly with help from Shirin’s parents.

They ran the same numbers you saw above. They understood that renting and investing could leave them richer on paper. They bought anyway, and here is their reasoning:

• They are not going anywhere. Both jobs are stable, the children’s school is fixed for the next ten years, and both sets of parents live nearby. A 20-year horizon is realistic for them.
• They know themselves. In twelve years of renting, they never managed to invest regularly beyond a small DPS. They think the EMI will make them save in a way they would not on their own.
• They were tired of moving. Three landlords in eight years, two of them with sudden rent increases, and one who sold the building. The security of their own front door has real value to them.
• The EMI fits. At Tk 1.08 lakh, it takes about 43% of their income. That is tight, but they have kept six months of expenses in a separate emergency fund before buying.
• They plan to prepay. Any bonus or increment goes toward the loan, which could cut years and lakhs of interest off the total.

Their answer is not “buying is always better”. It is “buying is better for us, because we will stay long enough and we know we will not invest the difference”. That is a sound reason.

Family two: why the Karims kept renting

Nabila and Tanim (also an illustrative composite) are in their early thirties with one young child. Tanim is a software engineer; Nabila works in development. They take home about Tk 1.6 lakh a month and have also saved around Tk 55 lakh.

They looked at the same flat and decided to keep renting. Their reasons:

• The EMI would take two-thirds of their income. Tk 1.08 lakh out of Tk 1.6 lakh leaves too little for everything else, and no room for a job loss or illness.
• Their future is uncertain. Tanim may take a job abroad within a few years, and Nabila’s work is project-based. Locking into one flat for 20 years did not fit.
• They are disciplined savers. They already invest a fixed amount every month through automatic transfers. The “disciplined renter” column above is close to how they actually live.
• Flexibility has value. They can move closer to work or a better school without selling a flat. Renting near the metro keeps their commute short.
• They have not ruled out buying. Their plan is to revisit the question in five years, when their income is higher, their plans are clearer, and interest rates may be lower.

Their answer is not “renting is always better” either. It is “renting is better for us, now“. That, too, is a sound reason.

What the spreadsheet cannot show

Numbers are only half the decision. These matter just as much, and they push in different directions.

In favour of buying

• Security in old age. A paid-off flat means no rent after retirement, when income usually falls. In a country without a broad pension system, that matters a lot.
• Protection from rent shocks. Your EMI does not rise because the landlord’s son got married.
• Freedom to change the home. You can renovate, paint, or knock down a wall without asking anyone.
• Something to pass on. Many families value leaving a home to their children.
• Social and family expectations, which are real even if they are not financial.

In favour of renting

• Flexibility. Job change, transfer, a better school, a move abroad: renting makes each of these easy.
• No concentration risk. Putting most of your wealth into one flat in one building ties your fortune to that building, that developer and that neighbourhood.
• Liquidity. Money in FDRs or Sanchayapatra can be reached in weeks. Selling a flat can take months.
• No big repair bills. Lift replacement, water tank leaks, a new generator: owners share these, tenants do not.
• Less stress. A 20-year loan is a long commitment. Some people sleep better without one.

Risks specific to buying in Dhaka

Even if the numbers work, buying a flat in Dhaka carries risks you should understand before you pay a single taka.

• Handover delays. Under-construction flats are often delivered months or years late. During that time you may be paying both rent and instalments.
• Land and title problems. Most flats are built under joint venture agreements between a landowner and a developer. Disputes between them, or unclear land records, can delay registration for years.
• Approval issues. Buildings must follow RAJUK’s approved plan. Extra floors or changes beyond the approval can create legal trouble later.
• Construction quality and safety. Dhaka sits in an earthquake-sensitive region. Ask about the structural design and whether the building follows the national building code.
• Owners’ association problems. Poorly run associations can leave lifts, generators and water pumps neglected.
• Waterlogging and access. Visit in the monsoon. A road that floods every July will affect both your life and the resale value.
• Rule changes. The Detailed Area Plan (DAP) has changed how many floors can be built on smaller plots, which affects supply and prices. Future rule changes can move prices either way.

A buyer’s document checklist

If you decide to buy, have a lawyer check these before you sign or pay:

1. Land ownership documents: the title deed, the chain of past deeds, khatian records and mutation, showing the landowner really owns the land.
2. Joint venture agreement and power of attorney between landowner and developer, showing the developer has the right to sell your flat.
3. RAJUK approval and approved building plan, matching the actual building.
4. Allotment letter and sale agreement with the flat number, size, price, payment schedule and handover date.
5. Penalty clause for late handover: what the developer pays you if they are late.
6. Exact list of what is included: parking, fittings, utility connections, common facilities.
7. Proof of no outstanding mortgage on the land or building.
8. The developer’s track record: visit their completed buildings and talk to owners living there.

If you rent: how to rent smart

Renting only beats buying if you rent well and save well. A few habits help:

• Get a written agreement with the rent, the advance, the notice period, and how and when rent can rise.
• Know the law on advances. The Premises Rent Control Act, 1991 limits how much advance a landlord can demand. In practice many ask for more, but knowing the rule helps you negotiate.
• Negotiate longer terms. A two or three-year agreement with a fixed yearly increase protects you from sudden jumps.
• Take photos when you move in, so you get your advance back when you leave.
• Automate your investing. The renter’s advantage exists only if the money is actually invested. Set up a DPS or monthly transfer on salary day. Our guide on how to save money in Dhaka shows how.

Middle paths worth considering

It does not have to be all or nothing.

• Buy smaller. An 800 sq ft flat instead of 1,200 cuts the price, the loan and the EMI by a third. You can trade up later.
• Buy further out, near the metro. Areas along the metro line or in developing neighbourhoods cost less per square foot, though prices near stations have already risen.
• Put down more than 30%. A bigger down payment means a smaller loan and much less interest. If you can borrow 50% instead of 70%, the total interest falls sharply.
• Take a shorter loan. A 15-year loan has a higher EMI but much lower total interest than a 20-year one.
• Rent now, save toward a bigger down payment. Five years of disciplined saving can turn a 30% down payment into 50%, and you buy with a clearer view of your life.
• Prepay whenever you can. Check the loan’s early settlement terms first, then put bonuses toward the principal.

A quick decision guide

Buying probably makes sense if…	Renting probably makes sense if…
You will stay in the same area for 10 years or more	You might move city, country or job in the next 5 to 7 years
The EMI is under about 40% of your take-home pay	The EMI would take half your income or more
You have an emergency fund separate from the down payment	Buying would use every taka you have saved
You know you will not invest regularly on your own	You already invest a fixed amount every month
Your jobs and incomes are stable	Your income is irregular or project-based
Security and ownership matter deeply to your family	Flexibility matters more than ownership right now
You have checked every document with a lawyer	You are being rushed to sign or pay a booking fee

If most of your answers fall in one column, that is a strong sign. If they are split, waiting a year or two while saving hard is rarely a mistake.

This article is general information using published market data and our own illustrative calculations. It is not financial, legal or investment advice. Flat prices, interest rates, rents and taxes change, and your situation is unique. Speak to a qualified adviser and a lawyer before making a property decision.

Frequently asked questions

Is it better to buy or rent a flat in Dhaka?

It depends on how long you will stay, how much of your income the EMI takes, and whether you will invest the money you save by renting. On pure maths, renting and investing the difference often wins because rents are low compared with flat prices. Buying tends to win for families who stay long-term and would not otherwise save regularly.

How much down payment do I need to buy a flat?

Banks usually lend up to 70% of the price, so you need at least 30%, plus registration costs, taxes and extras. On a Tk 1.32 crore flat, that came to about Tk 55 lakh in our example.

What is the maximum home loan in Bangladesh?

Up to Tk 4 crore from banks with low default rates, Tk 3 crore or Tk 2 crore from others, according to Bangladesh Bank rules reported in January 2026.

How much does it cost to register a flat?

Stamp duty (about 1.5%), registration fee (about 1%) and local government tax (about 2%), plus a source tax that depends on area and size, and VAT on flats from developers. We budgeted 8% of the price as an estimate; confirm current rates before you buy.

How long should I plan to stay to make buying worthwhile?

In our model, buying rarely pays off in under seven to ten years. In the early years, almost all of the EMI is interest, and selling costs eat into any gain.

What is rental yield and why does it matter?

It is a year’s rent divided by the flat’s price. In Dhaka it is often below 3%, while home loans cost over 10%. That gap is why renting is often cheaper year by year.

Will flat prices keep rising?

Nobody knows. Prices near the metro jumped sharply in recent years, but past rises do not guarantee future ones. That is why we tested three growth rates rather than assuming one.

Key words explained

Term	What it means
EMI	Equated Monthly Instalment. The fixed monthly loan payment, part interest and part principal.
Down payment	The part of the price you pay from your own money, usually at least 30%.
Principal	The amount you borrowed, as opposed to interest.
Equity	What you truly own: the flat’s value minus what you still owe the bank.
Rental yield	A year’s rent as a percentage of the flat’s price.
Opportunity cost	The return you give up by putting money into one thing instead of another.
RAJUK	Rajdhani Unnayan Kartripakkha, the authority that approves building plans in Dhaka.
DAP	Detailed Area Plan. Dhaka’s zoning rules, including how high buildings can go.
Joint venture	An agreement where a landowner gives land to a developer in exchange for a share of the flats.

How we reported this

Flat prices by area come from the Daily Observer (August 2026) and The Business Standard (January 2025). Home loan rules come from Prothom Alo’s January 2026 report on Bangladesh Bank’s revised caps. Rent levels and the BBS rent index come from Prothom Alo’s October 2026 reporting. Registration cost percentages are from a developer’s published buyer guide and should be checked against current rates. The two families are illustrative composites, not real people. All EMI, first-year and long-run figures are our own calculations, run in a script, with every assumption stated in the text so readers can test their own numbers.