Rent or Buy a House in Lahore? How to Decide

A 10 marla full house in Bahria Town was asking Rs 180,000 to Rs 220,000 a month in October 2026 listings. A subsidised home loan of Rs 10 million at 5% costs about Rs 66,000 a month in instalments. Put those two numbers side by side and buying looks like the obvious answer, until you remember the loan only covers Rs 10 million. The rest of the purchase price, the taxes, the society charges and the years of maintenance still have to come from somewhere. Renting and buying are not two prices for the same thing. They are two different commitments, and the right one depends on how long you plan to stay, how much cash you actually have, and how much risk you want to carry.

Reviewed by Shakir Estate. Last updated: 26 October 2026. All rent figures below are asking rents from current listings, not confirmed deals. This is general information, not tax or legal advice.

The short version

• Renting in Lahore buys flexibility and a known monthly cost, but builds no equity and leaves you exposed to rent rises and a landlord's plans.
• Buying builds equity and gives you control, but the upfront bill is much larger than the price on the board, and selling takes time.
• The subsidised Apna Ghar loan changes the maths for eligible first-time buyers, because 5% fixed for ten years is far below market loan pricing. It does not change the maths for everyone, since it is capped at Rs 10 million and limited to first-time buyers.
• Before comparing a rent with an instalment, compare the full cost of each option over the time you actually expect to live there.

What renting actually costs right now

Asking rents move more with block, furnishing and whether you take a full house or a portion than with the marla size alone. The October 2026 listings below are a starting point, not a city average, and every figure should be checked against the specific street you are looking at.

Two warnings sit behind that table. First, portions cost far less than full houses. A 10 marla upper portion in Bahria Town was listed at Rs 45,000 to Rs 62,000 in the same October listings where full houses asked Rs 180,000 to Rs 220,000. If a dealer quotes you a portion price as if it were a full house price, or the other way round, the comparison falls apart. Second, furnished houses carry a sharp premium. A furnished 10 marla in Bahria Town was listed at Rs 250,000, and a furnished 10 marla in DHA Phase 5 at Rs 299,000. Furnishing is not the norm, so do not budget from furnished cards unless you plan to rent furnished.

Renting also has costs that never appear in the monthly figure. Market practice in Lahore is one to three months' rent as a refundable security deposit plus one month's advance rent, and that money is tied up for the whole tenancy. Our guide to renting a house in Lahore covers the agreement, the deposit and the police registration rule in full. One point from that guide matters for this decision: under the Punjab Information of Temporary Residents Act 2015, the landlord, the dealer or the tenant must inform the police within 15 days of possession, with penalties of up to six months' imprisonment and a fine of Rs 10,000 to Rs 100,000 for skipping it. Register within a day or two rather than testing the limit.

What buying actually costs each month

The subsidised loan, for those who qualify

The Wazir-e-Azam Apna Ghar Programme is the cheapest verified borrowing route in October 2026. It is open to first-time homeowners who own no house or flat, it lends up to Rs 10 million, it charges 5% fixed markup for the first ten years, then 1-year KIBOR plus 3% for the remaining tenure, and it runs for up to 20 years with up to 90% financing. Eligible houses go up to 10 marla and flats up to 1,500 square feet, and the programme charges no processing fee and no prepayment penalty. It is a different scheme from Punjab's Apni Chhat Apna Ghar programme, so do not mix up their terms.

The instalment figures below are arithmetic illustrations at 5% over 20 years, not bank quotes. Your bank's schedule governs.

That is why the subsidised loan matters so much to this decision. A Rs 10 million loan at 5% costs roughly what a 5 marla house in Bahria Town asks in rent, and far less than a 10 marla full house. But the loan is capped, and a house that costs several times Rs 10 million still needs the balance in cash, plus the purchase costs in the next section. A small loan on an expensive house does not make the house cheap.

Market loans, and the rate decision still pending

Conventional bank home finance is typically priced at 1-year KIBOR plus around 3% for salaried borrowers, with higher spreads for self-employed and non-resident borrowers. The State Bank's policy rate was 11.5%, held at the monetary policy meeting of 14 September 2026. The policy rate is not your loan rate, and with 1-year KIBOR in the low teens in late October 2026, a KIBOR plus 3% loan lands well above the subsidised 5%. Confirm the current KIBOR and your bank's spread before deciding, because no verified hard market rate could be pinned down for publication on the morning of 26 October.

One timing note. A State Bank monetary policy decision was due on 26 October 2026, and at the time of writing no decision had been announced. Market forecasts pointed mostly to a rise, but a forecast is not a decision. Check the State Bank announcement before relying on any rate quoted here, and read the full loan picture in our home loan guide for Lahore.

The upfront bill buyers forget

A purchase price is not a purchase cost. On top of the price, a filer buyer pays advance tax under section 236K at 1.25% flat, and a filer seller pays under section 236C at 2.75% flat, both adjustable against annual income tax. Non-filers pay far more: 236K at 10.5% up to Rs 50 million, 14.5% from Rs 50 million to Rs 100 million and 18.5% above that, with 236C at 11.5% flat. On a Rs 30 million purchase, that is Rs 375,000 for a filer buyer against Rs 3,150,000 for a non-filer buyer in the lowest tier. Filer status is worth sorting out before the transfer date, not after.

Stamp duty is the one figure you should not budget from a single headline. April 2026 reporting said a Punjab ordinance standardised stamp duty at 1% across the province, while an October 2026 e-registration guide still shows 2% for urban sale deeds under the consolidated Stamp Act, with the rural rate cut from 3% to 1%. Treat the urban figure as disputed and confirm it on your e-stamp challan and with the registrar. Society and DHA charges sit on top of all of this, and published DHA house transfer tables disagree with each other, so confirm the current schedule directly with the authority rather than budgeting from a blog table. Our property tax guide works through each layer separately.

Rent, instalment and yield, put together properly

Gross rental yield is annual rent divided by property value. Published 2026 market guides put gross yields on Lahore houses at roughly 3% to 5% a year, with Bahria Town active sectors up to about 5% to 6% in one guide, while apartments are commonly quoted higher, around 5% to 8% gross. Net yield is always lower than gross, once maintenance, vacancy, society charges and tax are counted, and no verified net yield figure for houses could be published here. Our Lahore rental yield guide explains the gross to net gap in detail.

For a buyer, yield is a cross-check, not a verdict. A house with a low gross yield can still be a sound home if you plan to live in it for a long time, because you are buying a place to live as well as an asset. For an investor, a low yield means the rent alone will not carry the purchase, so the case has to rest on long term price growth, and price growth is never guaranteed. For a renter, yield explains why landlords behave the way they do: at a 4% gross yield, a landlord needs the rent to keep pace with costs, which is why the rent increase clause in your agreement matters more than the first year's rent.

When renting wins, and when buying wins

Renting wins when your stay is short or uncertain, when your cash is better kept liquid, when you want to test an area before committing, or when the house you want costs far more than any loan you can get. A family posted to Lahore for two years, or a buyer still deciding between DHA and Bahria Town, gains little from paying transfer taxes and society charges twice in quick succession.

Buying wins when you plan to stay for many years, when you qualify for the subsidised loan, when the monthly instalment sits comfortably inside your income, and when the house itself checks out on papers and condition. Staying put is what turns the upfront bill into a reasonable annual cost. Moving after eighteen months does the opposite.

A middle path exists in Lahore and deserves a mention. Some buyers live in one portion and rent out the other, which is why the portion figures in this article matter. It only works if the house genuinely suits two households, the portions are properly separated, and the society allows it. Check all three before counting any rental income in your budget.

A decision checklist before you commit

Work through these in order, because each one can change the answer.

• How long will you realistically live in this house, in this area, at this size?
• What is the full upfront cost of buying, including 236K, stamp duty on the confirmed figure, and the society schedule, not just the price?
• What is the true monthly cost of each option over that period, including deposit money tied up while renting and maintenance and society charges while owning?
• If you borrow, is the instalment affordable if rates move, and what happens to an Apna Ghar loan after the first ten years?
• Is the property itself sound, with the deed, Fard, mutation, approved plan and no dues certificate in order? Our guide to buying a house in Lahore sets out those checks.

If you are still comparing specific houses, check your property's estimated value with Shakir Estate's AI Property Value Estimator before you negotiate or sign. AI valuations are estimates based on available market information and property inputs. Actual sale value can vary according to exact location, condition, plot orientation, street width, development status, demand, documentation and negotiation.

Frequently asked questions

Is it cheaper to rent or buy in Lahore?

It depends on the house, the loan and how long you stay. A subsidised 5% loan can make buying cheaper per month than renting a comparable full house, but only up to the Rs 10 million loan cap, and only after counting the upfront taxes and charges.

Does the 5% Apna Ghar loan make buying always better?

No. It is limited to first-time buyers, houses up to 10 marla and flats up to 1,500 square feet, and loans up to Rs 10 million. After ten years the rate moves to 1-year KIBOR plus 3%, so the long term cost is not fixed at 5%.

What happens to rent if I stay for years?

Rent rises are governed by your agreement, not by a standard percentage. No verified standard annual increase could be published, so the increase clause belongs in the contract from day one.

Do tenants pay withholding tax on rent?

Only when the payer is a prescribed person, such as a company or a registered business. Individual tenants paying an individual landlord do not automatically deduct tax. For individuals and associations of persons, the 2026-27 slabs run from nil up to Rs 300,000 of annual rent, then 5% of the excess to Rs 600,000, Rs 15,000 plus 10% to Rs 2 million, and Rs 155,000 plus 25% above that, with companies at a flat 15%.

Should an overseas Pakistani rent first?

Renting first is often sensible when you are buying from abroad, because it lets you test the area and the house without committing the full purchase cost. The police registration and agreement rules still apply, and a local inspection before signing matters even more from a distance.

The honest answer

There is no citywide answer to rent or buy, only a household answer. Run the numbers on one specific house, over the time you will actually live in it, with the taxes confirmed and the loan in writing. If renting leaves you free and buying leaves you stretched, renting is the better decision for now, and a better purchase later beats a forced purchase today. If the loan is subsidised, the papers are clean, the instalment is comfortable and you plan to stay, buying is hard to beat.

If you want a second pair of eyes on the comparison for a specific society, block and size, message Shakir Estate on WhatsApp at +92 300 4630499. Tell us the rent you have been quoted and the purchase price you are considering, and we will tell you honestly what can be verified and what cannot, before you commit any money.