Formula
Rent to income ratio = monthly rent / gross monthly income x 100
If rent is $1,650 and gross monthly income is $5,500, the ratio is 30 percent. If the same rent is checked against $4,500 income, the ratio is about 36.7 percent.
Quick ratio table
| Gross monthly income | $1,200 rent | $1,600 rent | $2,000 rent |
|---|---|---|---|
| $4,000 | 30% | 40% | 50% |
| $5,500 | 22% | 29% | 36% |
| $7,000 | 17% | 23% | 29% |
Use take-home pay as the second check
A ratio based on gross income can look fine while the monthly cash flow still feels tight. After the ratio check, subtract debts, utilities, insurance, transportation, savings, groceries, and a basic living buffer.
Helpful next step: Use the main rent affordability calculator to compare the ratio against take-home pay and move-in cash.