For most people looking to rent a home, the monthly rent is only half the story.
Before they even move in, tenants are often required to pay security deposits worth several months’ rent, locking away lakhs of rupees that could otherwise be invested, used for emergencies or spent on other financial goals. In India’s biggest cities, these upfront payments have quietly become one of the largest—and least discussed—costs of renting.
A new NoBroker Rent Report 2026 reveals just how significant this burden has become. According to the report, tenants across India’s six largest metro cities currently have Rs 1,26,042 crore locked up in security deposits with landlords. To put that into perspective, the report notes that this amount is larger than the annual infrastructure budgets of several Indian states.
Unlike rent, which is a monthly expense, security deposits remain locked for the entire duration of the tenancy.
The report describes this as idle household capital that could otherwise earn returns through investments, fund education, support a home purchase or simply provide families with greater financial flexibility. Instead, it remains tied up with landlords, often for years.
“This isn’t just idle money—it’s capital that could have been earning returns in the stock market, funding education, or simply providing financial security,” the report noted.
Among the six metros covered in the study, Mumbai accounts for the highest amount of tenant money tied up in security deposits.
According to the report:
The figures underline how security deposits have become a major financial commitment, particularly in India’s largest cities where rental demand remains strong.
While rising rents often dominate discussions around housing affordability, the report suggests that the bigger challenge for many tenants is arranging the hefty security deposit before they can move into a house.
Bengaluru stands out as the city where this burden is felt the most.
According to the report, 75% of tenants in Bengaluru said a high security deposit had stopped them from renting a home they liked—the highest among all six metros surveyed. Many said they had to compromise on location, size or amenities simply because they could not arrange the upfront deposit.
The report also found that many tenants would rather pay a slightly higher monthly rent if it meant a substantially lower security deposit, highlighting how the upfront payment has become a bigger hurdle than the monthly rent itself.
Paying the security deposit is only one part of the challenge. Getting it back can sometimes be another.
The report found that Chennai has the poorest security deposit refund record among the six metros. Around 11% of tenants surveyed said they never got their security deposit back from their landlord at all.
The finding points to another hidden risk in India’s rental market. Besides locking away significant savings for years, tenants also face uncertainty over whether they will receive the full amount back when they vacate the property. Disputes over deductions for repairs, painting, maintenance and normal wear and tear continue to be common.
The report argues that security deposits are no longer just a landlord-tenant issue—they also have wider economic implications.
With over Rs 1.26 lakh crore lying idle across six major cities, a substantial amount of household savings remains outside productive use. That money could otherwise flow into mutual funds, fixed deposits, equities or even consumer spending, helping households build wealth while supporting economic activity.
The burden is particularly heavy for young professionals relocating for work, first-time renters and families moving cities, who often have to arrange several lakh rupees upfront before paying their first month’s rent.
As India’s rental housing market continues to grow, the report suggests there is a case for rethinking the traditional security deposit model.
Several countries have introduced alternatives such as rental deposit insurance, bank guarantees or low-deposit rental programmes that reduce the upfront financial burden on tenants while still protecting landlords against potential losses.
Similar models are slowly gaining attention in India, but for now, hefty security deposits remain the norm.
For millions of Indians, renting a home no longer means just budgeting for monthly rent. It also means setting aside lakhs of rupees as security deposits—and hoping they will eventually get the money back in full.
With Rs 1.26 lakh crore now locked away across India’s six biggest metros, security deposits have quietly become one of the biggest—and least talked about—costs of renting a home.