Under-construction or ready-to-move: which actually costs less?

Ask most buyers why they would take an under-construction flat and the answer is the discount. In 2025 that assumption looked shaky. Magicbricks reported that under-construction homes carried higher average asking prices than ready-to-move homes in three major metros: ₹25,921 against ₹18,698 per sq ft in Delhi, ₹17,185 against ₹14,617 in Gurugram, and ₹32,371 against ₹28,935 in Mumbai.

Averages don't settle your decision, though. You're choosing between two specific flats, and the sticker price is only one of the costs. Here's how to compare them properly.

Compare the same decision period

The most common mistake is comparing an under-construction flat's costs before possession with a ready-to-move flat's costs after you buy it. That is two different time windows. Pick one horizon and run both options through it.

Our worked example uses five years, two comparable flats and these illustrative inputs:

Acquisition costs and financing

Three official rules shape the cash you need up front.

GST applies to under-construction homes only. Since April 2019 the rate has been 5% without input tax credit for non-affordable homes and 1% for affordable homes. Affordable means up to 60 sq m of carpet area in metros or 90 sq m elsewhere, priced up to ₹45 lakh. No GST is charged where the entire price is paid after the completion certificate is issued, or after first occupation if that comes earlier.

In our illustration, 5% GST on the ₹1.2 crore flat is ₹6 lakh.

Banks can lend at most 75% on large loans. RBI caps the loan at 80% of the property's cost for loans above ₹30 lakh up to ₹75 lakh, and 75% above ₹75 lakh.

Stamp duty comes out of your own pocket. The same circular says stamp duty, registration and documentation charges can't be included in the property cost a bank finances, except for homes costing up to ₹10 lakh.

Put together, the cash you need on day one is very similar for both flats in our example:

Monthly paths for both options

Under-construction. In the illustration, under a construction-linked plan, the bank releases the loan in stages, and you pay interest only on what has been released (often called pre-EMI). We assume the ₹90 lakh is drawn evenly over 36 months. That costs about ₹12.5 lakh in interest before possession, roughly half the ₹24.3 lakh you'd pay if the whole loan were drawn on day one. You also keep paying rent, ₹9 lakh over three years. From possession, a full EMI of ₹80,975 a month starts.

Ready-to-move. In the illustration, the full ₹1.01 crore loan starts on day one, with an EMI of ₹91,097 a month. Over five years that EMI includes about ₹43.2 lakh of interest. You pay no rent, because you live in the home.

The earlier version of this article left this second line out entirely. Leave out the ready-to-move buyer's interest, and almost any under-construction flat looks expensive.

Here is the full five-year picture, counting each flat's price plus everything that isn't loan principal (stamp duty, GST, interest and rent). It assumes the two flats are worth the same once both are finished.

On these illustrative inputs, the cheaper flat still wins, even with a two-year delay. That's because the ₹15 lakh price gap is bigger than the rent, GST and pre-EMI the under-construction buyer pays. The real question is how big the ready-to-move premium is.

The break-even premium in this example is about ₹3.6 lakh if possession is on time, ₹5.9 lakh with a 12-month delay and ₹8.1 lakh with a 24-month delay. Below that, the ready-to-move flat is the better buy. Above it, the under-construction flat is cheaper on paper.

Delay and liquidity

Delays are common enough to plan for. In mid-2022, Anarock counted about 4.8 lakh homes worth ₹4.48 lakh crore stuck or delayed across India's top seven cities. That count covers projects launched in 2014 or earlier, so it shows the scale of the problem, not the odds for any one project.

Two things the delay maths above doesn't capture:

• A project that stalls completely. The model assumes you eventually get the flat. If construction stops, your money is locked in and you may be paying pre-EMI on an unfinished home. That risk can't be priced as a few extra months. You reduce it by checking the developer's record first; our guide to spotting delay risk covers how.
• Being able to change your mind. Money committed to an under-construction flat is hard to get back if you need to move or your finances change. A ready-to-move flat can be sold or rented from the start.

Check the project's RERA registration and its declared completion date before you compare anything. Have the title checked too.

When each option may fit

Under-construction can make sense when the price gap to a comparable ready flat is well above the break-even for your own numbers, you can afford rent and pre-EMI together, and the developer has delivered similar projects on time.

Ready-to-move can make sense when the price gap is small, your rent is high, you need certainty on the move-in date, or you can't carry rent and pre-EMI at the same time.

Either way, run your own numbers. Your price gap, your rent, your state's stamp duty and the disbursement schedule in your agreement will change the answer. These figures are an illustration, not a verdict on your flat.

What the Gulmohar evaluation checks

When you evaluate a specific property, Gulmohar compares its price with local benchmarks, tests whether the EMI fits your income, and runs stress scenarios. These include an income drop, a job loss and an interest-rate rise of up to 3 percentage points. The area's under-construction supply also feeds into the liquidity score. If you pick the project from Gulmohar's RERA registry, the evaluation also reads its registration status and how far it is past its registered completion date. The evaluation doesn't currently model a possession delay, so use the delay scenarios above alongside it.

To see what the extra costs add up to for your own purchase, use the free true buying cost calculator.