I'm feeling for a survival horror game but I don't know which one to choose.

Which type of horror are you looking for?

Although The Evil Within is a good game, RE 7 is simply superior.

But playing devil advocate, if you dont want spend too much money, The Evil Within is probably much cheaper, seeing that it is an older game, so it may be worth purchasing that now and RE 7 when its cheaper.

But RE 7 is still the better game.

I would say both but maybe start with RE7! I'm a huge fan of the Resident Evil series and while I enjoyed The Evil Within, I was also massively disappointed with it. It's made by the mastermind of the RE universe Shinji Mikami. He reused concepts from RE4, but the game didn't play nearly as well as it and was hardly memorable. The story was quite interesting but had some inconsistencies and requires you to get the DLC to understand one of the main characters. I would still recommend it because from what we've seen of "The Evil Within 2" it's going to be a huge upgrade to the original and it's looking like it'll be an amazing game and probably touching more what Mikami envisioned for the first game. After he left Capcom he had a much smaller team to make TEW with Bethesda publishing. The sequel will for sure have a bigger budget.

As for Resident Evil 7 it's pretty amazing. As a huge fan of the series it does capture the atmosphere but it's also very different. I would highly recommend it because it's much more survival horror based than say "The Evil Within" which is more action survival horror like RE4, but with much less scares (nothing comes close to the Regenerators). Also if you haven't played Resident Evil Revelations 2 yet then that's also a very good one to play as well.

RE7, easily. Evil within was gory and frustrating with horror imagery but I never felt scared. RE7 has the atmosphere, production values, etc.

Both are excellent.

Both are great. RE7 looks nicer. Evile Within has a better story. RE7 IMO isn't scary so much as it is crazy. RE7 is more or less classic RE but in first person. Evil Within is taking the RE4 formula and expanding upon it. So I guess decide what you like more. Classic RE in First Person but a little more zany or RE4.5

I enjoyed The Evil Within a lot more

both are good

Until dawn is fantastic and is currently free on PSN if that helps