Rent-to-Income Ratio Calculator
Rent as a percentage of income with affordability thresholds
Calculate rent-to-income ratio with affordability categorization. 30% rule ceiling and cost-burdened thresholds. Free and runs in your browser.
What this tool does
Enter monthly rent and gross monthly income to see rent as a percentage of income and whether it falls in the affordable (≤30%), stretched (30-40%), or cost-burdened (>40%) category. Standard housing affordability metric used by landlords, lenders, and tenants.
Enter Values
Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
The 30% Rule
A widely-cited guideline states rent should not exceed 30 percent of gross monthly income. The source is HUD (U.S. Department of Housing and Urban Development) data showing that households spending more than 30 percent typically struggle to cover other essentials. Between 30-40 percent is 'stretched'; above 40 percent is 'cost-burdened'.
Why Landlords Care Too
Most landlords require gross income of at least 3x monthly rent (equivalent to a 33 percent rent-to-income ratio) before approving a tenancy. Some competitive markets demand 4x. Knowing your ratio helps predict application approval before touring properties.
Quick example
With monthly rent of 1,500 and gross monthly income of 5,000, the result is 30.00%. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.
Which inputs matter most
You enter Monthly Rent and Gross Monthly Income. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.
What's happening under the hood
Divides monthly rent by gross monthly income and multiplies by 100. Affordability thresholds use the HUD-defined 30 percent rule and cost-burden definition. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.
Using this well
Treat the output as one point on a wider map. Run it three times — a pessimistic case, a central case, and a stretch case — and plan against the pessimistic one. That habit alone separates people who stick with an investment plan from those who bail at the first wobble.
What this doesn't capture
Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. Treat the number as one scenario, not a forecast.
Rent-to-income estimate indicates 30.00% of monthly income.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
Divides monthly rent by gross monthly income and multiplies by 100. Affordability thresholds use the HUD-defined 30 percent rule and cost-burden definition.
References
Frequently Asked Questions
Is the 30% rule universal?
Should I use gross or net income?
What about roommates?
Does this include utilities?
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