Rent to Income Calculator
Assess housing affordability instantly with our professional-grade rent-to-income calculator. Determine if you’re rent-burdened and make informed housing decisions.
Interactive Rent to Income Ratio Calculator
Calculate your rent-to-income ratio with step-by-step explanations and visual gauge. Professional tool for housing affordability assessment.
Rent to Income Ratio Formula
Rent-to-Income Ratio Definition
The rent-to-income ratio is calculated by dividing monthly rent by monthly income (gross annual income ÷ 12) and multiplying by 100:
Key Components
- Gross Annual Income: Total annual income before taxes and deductions
- Monthly Rent: Monthly housing cost including base rent
- Monthly Income: Gross annual income divided by 12
Interpretation Guide (30% Rule)
- Ratio ≤ 30%: Low – Ideal, aligns with the 30% rule, indicating affordable rent
- Ratio 30%–50%: Moderate – Manageable but may strain finances, limiting savings
- Ratio > 50%: High – Financially risky, often called “rent burdened”
How to Use the Calculator
Simple steps for accurate affordability analysis
Enter Annual Income
Input your gross annual income before taxes and deductions
Enter Monthly Rent
Input your monthly rent payment for the property
Get Analysis
View your ratio with affordability status and housing recommendations
Frequently Asked Questions
The rent-to-income ratio is a financial metric that measures the percentage of your income spent on rent. It’s calculated by dividing monthly rent by monthly income and multiplying by 100. This ratio helps assess housing affordability and prevent rent burden.
To calculate: Divide your gross annual income by 12 to get monthly income. Then divide monthly rent by monthly income and multiply by 100. Example: ($1,500 rent ÷ $5,000 monthly income) × 100 = 30% ratio.
A good ratio is 30% or less, following the “30% rule” for housing affordability. Ratios between 30-50% are moderate but may limit savings. Ratios above 50% indicate rent burden and financial strain.
The 30% rule is a guideline that recommends spending no more than 30% of gross monthly income on housing costs. This ensures sufficient funds remain for other expenses, savings, and debt payments while maintaining financial stability.
You can lower your ratio by finding more affordable housing, increasing your income through raises or side jobs, getting a roommate to split costs, negotiating rent with your landlord, or moving to a lower-cost area while maintaining income.
“Rent burdened” refers to households spending more than 30% of income on rent. Those spending over 50% are considered “severely rent burdened.” This situation leaves limited funds for other necessities, savings, and emergencies.
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