How much rent can I afford?
The most common guideline is to spend no more than 30% of gross income on rent. Landlords often apply a related test: income of at least three times the rent.
The formula
Affordable rent = gross monthly income × 30%
Worked example
A $60,000 salary is $5,000 a month. 30% is $1,500. The landlord’s 3x test would allow up to about $1,666.
How to use this calculator
Enter your gross income, which is your pay before tax, your monthly debt payments and the share of income you want to spend on rent, such as 30%. The calculator shows the rent you can afford at that share, what is left after rent and debts, the highest rent that passes a landlord’s 3x income check, and the rent that keeps your total debt under 43% of income. If you came here asking how much rent can I afford, treat the lowest of those figures as your working limit.
What the result means
The 30% figure is a budgeting guide. The 3x figure is the most a landlord using that test would approve, and it is always a little higher: one third of income is 33.3%. Being approved for a rent does not mean it is comfortable. Both figures use gross income, so your take-home pay will cover less than the percentages suggest.
More examples
Rent by income
| Yearly gross income | Monthly income | Rent at 30% | Highest rent under a 3x test |
|---|---|---|---|
| $40,000 | $3,333 | $1,000 | $1,111 |
| $60,000 | $5,000 | $1,500 | $1,666 |
| $80,000 | $6,667 | $2,000 | $2,222 |
| $100,000 | $8,333 | $2,500 | $2,777 |
The 3x column is rounded down to the dollar, because the rent has to stay at or under one third of income.
With monthly debts
Take the $5,000 monthly income from the worked example and apply the 40% check from the FAQ below. 40% of $5,000 is $2,000 for rent and debts together. With $400 of debt payments, $1,600 is left for rent, so the 30% figure of $1,500 still holds. With $700 of debt payments, only $1,300 is left, and that becomes your limit.
Other landlord tests
Some landlords ask for 2.5 times the rent, which would allow up to $2,000 on $5,000 a month. In some expensive markets the test is yearly income of 40 times the monthly rent. On $60,000 that is $1,500, the same as the 30% rule.
What changes the result
- Income. Each extra $1,000 of monthly gross income adds $300 of rent under the 30% rule.
- Debts. Once rent plus debts pass about 40% of income, each dollar of debt payment takes a dollar off your rent limit.
- Utilities. If they are not included in the rent, leave room for them inside the 30%.
- The landlord’s test. A 2.5x test allows more rent than a 3x test on the same income.
Common mistakes
- Using take-home pay in a formula built on gross income, or the other way round.
- Treating the landlord’s maximum as your budget. It is a ceiling, not a target.
- Forgetting utilities, parking and renters insurance.
- Ignoring car loans, student loans and card payments.
- Planning only for the first year. Rent can rise at renewal.
Related calculators
Sharing a place? The rent split calculator divides the rent fairly between roommates. Budget for the move itself with the moving cost calculator, and see what a future rise would do to your payment in the rent increase calculator.
Frequently asked questions
Does the 30% include utilities?
Strictly, the 30% guideline covers rent plus utilities, so budget a little less for rent alone.
What if I have debts?
Lower the figure. A useful check is that rent plus debt payments stay under about 40% of gross income.
How much income do I need for a given rent?
Use the 3x rent calculator.
Is the 30% rule based on gross or net income?
Gross income, before tax and deductions. If you prefer to budget from take-home pay, expect the same rent to be a larger share of it.
Is the 30% rule a requirement?
No. It is a rule of thumb. Landlords set their own income tests, often three times the rent, and some use 2.5 times.
What if my income is below the landlord’s test?
Ask the landlord what options they accept. Policies vary, so the answer depends on the property.
Can I afford more rent if I have no debts?
You have more room in your budget, but a landlord’s income test stays the same. On $5,000 a month, a 3x test still tops out at about $1,666.