If rent is the monthly squeeze, the security deposit is often the biggest financial hurdle tenants face, even before moving in. Bengaluru’s rental market has become almost synonymous with disputes over delayed or withheld security deposit refunds, with social media platforms such as Reddit, X and LinkedIn filled with renters recounting similar experiences.
Common complaints include landlords deducting money for repainting the home for the ‘next tenant’, charging for routine wear and tear, deep cleaning or minor repairs, or taking months to return the deposit, if they return it at all.
These individual disputes point to a much larger and largely overlooked financial reality. Across India’s six largest metropolitan regions, tenants have an estimated ₹1,26 lakh crore locked away as security deposits with landlords, creating a massive pool of idle capital that earns no returns, limits household liquidity and frequently becomes the subject of disputes when tenants move out, according to the NoBroker Rent Report 2026.
The burden is particularly acute in Bengaluru, where tenants collectively have an estimated ₹31,628 crore tied up in security deposits at any given time, second only to the Mumbai Metropolitan Region (MMR), where nearly ₹41,156 crore remains locked with landlords. Together, these two rental markets account for more than half of the nearly ₹1.26 lakh crore frozen across India’s six largest cities.
To put the scale into perspective, this amount exceeds the annual infrastructure budgets of several Indian states. Instead of flowing into personal investments, mutual funds, equities or household consumption, nearly ₹1.3 lakh crore remains parked as interest-free deposits with landlords. MMR tops the list due to its high rental values, while Bengaluru’s large share is driven by the city’s longstanding practice of demanding steep upfront security deposits, the report said.
Why are security deposits becoming a bigger burden?
The problem is straightforward. Security deposits are typically calculated as a multiple of the monthly rent. As rents have risen sharply over the past few years, the upfront amount tenants need to pay has increased proportionately, the report showed.
As a result, 75% of Bengaluru tenants said a high security deposit had prevented them from renting a home they liked at least once, one of the highest shares among major Indian cities, the report showed.
Only 35% of Bengaluru tenants got their full deposit back
For many Bengaluru renters, the financial strain does not end at move-in.
According to the report, only 35% of tenants in the city received their last security deposit in full without any issues. The remaining tenants encountered varying degrees of difficulty:
- 40% reported deductions from their deposit.
- 18% faced significant disputes with landlords.
- 7% said they never received their deposit back.
In other words, nearly two-thirds of Bengaluru tenants have experienced some form of problem while recovering their security deposit.
The frustration is so widespread that around three-fourths of Bengaluru tenants said they would be willing to pay a 5-10% higher monthly rent if it meant paying a substantially lower upfront security deposit, the report showed.
Delhi-NCR sees fewer deposit disputes
The experience is comparatively better in Delhi-NCR. Around 58% of tenants said they received their security deposit in full at the end of their lease. About 30% reported deductions, while 12% faced significant disputes over refunds.
Mumbai tenants spend the biggest share of their income on rent
While Bengaluru struggles with high upfront deposits, Mumbai remains the city where rent consumes the largest share of household income.
The report found that rent is the single biggest monthly expense for most urban tenants, with nearly half spending more than 30% of their income on housing. However, the burden varies significantly across cities.
Mumbai stands out as the most expensive market:
- 25% of tenants spend more than half their monthly income on rent.
- Another 15% spend 41-50% of their income on housing.
This means roughly four in ten Mumbai tenants allocate more than 40% of their earnings towards rent, the report showed.
Delhi-NCR follows closely
- 19% spend more than half their income on rent.
- Around 25% spend over 40% of their monthly earnings on housing.
Bengaluru offers a relatively better rent-to-income balance
Despite its reputation as one of India’s costliest rental markets, Bengaluru presents a relatively healthier rent-to-income profile.
Nearly 46% of tenants keep their housing costs within the relatively sustainable 20-30% income band, while only 13% spend more than 40% of their earnings on rent, the report showed.
The NoBroker findings suggest that while Bengaluru’s monthly rents may be comparatively manageable for many professionals, the city’s unusually high security deposit requirements continue to be its biggest pain point, creating a significant upfront financial barrier and fuelling persistent disputes between landlords and tenants.
