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Rent vs Parents' EMI Calculator

Compare your rent with what your parents paid as EMI - see the generational housing gap

👤 Your Details (Today)

🏠 Parents' Home Details

😰 Significantly Harder

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Calculating the generational gap...

📈
Their EMI (Inflation Adjusted)
Rs 0
In today's rupees
❌
Affordability Ratio
0x
Times harder today
💰
Monthly Gap
Rs 0
Extra you pay

📊 Monthly Cost Comparison

📈 Property Value Timeline

💰 Asset vs Expense

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Parents Built (Asset)
Rs 80 L
Current property value
💸
You Pay (Expense)
Rs 25K/mo
Rent builds no equity
💡 The Wealth Gap

Your rent for 0 years would equal your parents' current home value. They converted housing expense into a 0% appreciating asset. A similar home in your city today would cost Rs 0.

📋 Generational Comparison

💵 Income Burden Comparison

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Parents' EMI-to-Income
0%
EMI % of salary
👤
Your Rent-to-Income
0%
Rent % of salary
🔍 What This Means

Your parents spent a similar or lower percentage of income on housing, but they were building an asset. You spend on rent but get zero equity. To buy a similar home today, your EMI would be Rs 0 per month.

How to Use This Calculator

This calculator helps you understand the generational housing affordability gap by comparing your current rent payments with what your parents paid as EMI when they bought their home.

Step 1: Enter Your Details

Input your current monthly rent, your take-home salary, and select your city. This gives us your current housing cost and income context.

Step 2: Add Parents' Home Loan Details

Enter the year your parents took their home loan, their EMI amount back then, their salary at that time, and the current value of that property.

Step 3: Understand the Results

The calculator shows you:

Why Housing Affordability Has Changed

Several factors have contributed to the growing housing affordability gap between generations:

Property Prices vs Income Growth

While salaries have increased 8-15x over the past 25-30 years, property prices in major cities have increased 20-50x. This mismatch is the primary driver of the affordability gap.

Urbanization and Demand

Rapid urbanization has concentrated job opportunities in metro cities, driving up demand for housing in areas with limited supply. This has pushed prices beyond what middle-class incomes can support.

The Rent vs Buy Equation

In many cities, monthly rent is significantly lower than EMI for a similar property. While renting seems cheaper monthly, it doesn't build equity. Your parents' EMI payment was essentially a forced savings that grew into substantial wealth.

Interest Rates and Loan Availability

While interest rates have actually decreased (from 14-16% in the 1990s to 8-9% today), the absolute property prices have increased so much that total loan amounts and EMIs are still much higher than previous generations faced.

Frequently Asked Questions

Why is buying a home harder today than for our parents?
Property prices have grown faster than incomes over the past few decades. While salaries increased 10-15x, property prices in many cities increased 20-50x. This creates a significant affordability gap where today's generation needs to spend a much larger portion of their income on housing.
What is the generational wealth gap in housing?
The generational wealth gap refers to the difference in home ownership ability between generations. Parents who bought homes in the 1990s-2000s built significant equity as property values appreciated, while their children often struggle to afford similar properties despite having higher nominal salaries. This gap compounds over time as property owners benefit from appreciation while renters don't.
How do I calculate inflation-adjusted EMI?
Inflation-adjusted EMI converts your parents' historical EMI to today's purchasing power using cumulative inflation rates. For example, Rs 3,000 EMI in 1995 would be equivalent to approximately Rs 15,000-20,000 today when adjusted for average annual inflation of 6-7%. This helps you understand the real burden they faced in comparable terms.
Is renting always worse than buying?
Not necessarily. In high-cost cities where property prices are extremely inflated, renting can be financially sensible if you invest the difference between rent and potential EMI into equity funds or other investments. The key is discipline - if you rent and don't invest the savings, you're definitely worse off. Run the numbers for your specific situation.
What can I do about the affordability gap?
Several strategies can help: (1) Consider emerging locations or suburbs where prices are more reasonable, (2) Start investing early through SIPs to build a larger down payment, (3) Look at Tier-2 cities if your job allows remote work, (4) Consider joint ownership with spouse to increase loan eligibility, (5) Wait for market corrections in overheated markets while continuing to save.