How to use the Rent Affordability Calculator
- Enter your gross monthly income, before tax.
- Enter the share of income you are willing to spend on rent. 30% is a common starting point.
- Enter your other monthly debt payments, such as loans and credit card minimums.
- Compare the rent at your chosen share with the cautious figure.
Formula used
Rent = income × share. Cautious rent = income × 36% − other debts. Many landlords ask for a yearly income of about 40 times the monthly rent.
Worked example
Here is the Rent Affordability Calculator worked through with the example values shown above, so you can check each step by hand.
| Inputs | |
|---|---|
| Gross monthly income (before tax) | $5,000 |
| Share of income for rent | 30 % |
| Other monthly debt payments | $400 |
| Result | |
| Rent at your chosen share | $1,500 |
| Rent if all debts stay within 36% of income | $1,400 |
| Yearly rent at your chosen share | $18,000 |
| Yearly income many landlords ask for (40× monthly rent) | $60,000 |
Affordable rent at different incomes
With the default 30% share and 400 of other debts.
| Gross monthly income (before tax) | Rent at your chosen share | Rent if all debts stay within 36% of income |
|---|---|---|
| $3,000 | $900 | $680 |
| $4,000 | $1,200 | $1,040 |
| $5,000 | $1,500 | $1,400 |
| $6,500 | $1,950 | $1,940 |
| $8,000 | $2,400 | $2,480 |
The 30% rule
The guideline says to spend about 30% of gross income on housing. With $5,000 a month, that is $1,500 for rent, or $18,000 a year. At 25% it would be $1,250, and at 35% it would be $1,750.
It is a rule of thumb. In expensive cities many renters pay more than 30%, and in cheap areas you can pay less. Your own situation matters more than any rule.
The cautious figure that allows for debts
Your other debts reduce what you can safely pay. The cautious line assumes that all debt payments, including rent, should stay within about 36% of your income, a figure lenders often use for borrowers. With $5,000 income and $400 of other debts, that leaves $1,400 for rent.
With no other debts, the cautious figure would be $1,800; with $1,000 of debts it falls to $800. If the cautious figure is lower than the 30% figure, your debts are limiting how much rent you can comfortably carry.
What landlords look for
Many landlords require a yearly income of about 40 times the monthly rent, and some ask for credit checks, references and a deposit. For a $1,500 rent, 40 times is $60,000 a year. Requirements vary a lot by place and landlord, and some accept a guarantor or a larger deposit instead.
Check the requirements of the properties you are applying to before you set your budget.
The real cost of renting
Rent is not the only housing cost. Utilities, internet, renter’s insurance, parking, laundry and fees add up, and moving costs and deposits come on top. Also consider commuting: a cheaper place far from work may cost more once you count transport and time.
Use this calculator to set a ceiling and then plan the rest of your budget under it. If you are comparing renting with buying, use the mortgage calculator on this site.
Frequently asked questions
What is the 30% rule?
A guideline that rent should not exceed about 30% of gross income. It is a starting point, not a rule of law, and does not suit every budget or city.
Should I use gross or net income?
The common rule uses gross income, before tax. If you want to be more cautious, apply the percentage to your take-home pay.
Does it include utilities?
No. Utilities, renter’s insurance and parking add to the real cost of housing.
What is the 40 times rule?
Many landlords ask for a yearly income of at least 40 times the monthly rent. Requirements differ, so check with the landlord.
What if I have a roommate?
Enter your combined income and the whole rent, or each person’s income and their share of the rent.
How much should I save for a deposit?
A deposit is often one to two months of rent, but rules differ by place. Check local rules and the landlord’s terms.
This calculator gives estimates for information only. Actual figures from a bank, employer, tax authority or doctor may differ. It is not financial, tax, legal or medical advice.