Rent Affordability Calculator
How much rent your income supports by the two rules landlords and budgets both use: 30% of gross income, and the 40× rule (annual rent no more than income divided by 40).
The two rules every landlord and budget agree on
The 30% rule — housing at or under 30% of gross income — descends from US housing policy and survives as the standard affordability yardstick. The 40× rule is the landlord's mirror: annual rent should not exceed annual income ÷ 40 (which is the same as rent ≤ 2.5% of income monthly — a slightly stricter line). This page shows both, plus gentler and harder variants.
30% rule: max rent = income × 0.30 ÷ 12 · 40× rule: max rent = income ÷ 40
Example: on $65,000 a year: the 30% rule allows $1,625 a month; the 40× rule allows $1,354 — expect landlords using the second to judge your application, whatever the first says you can afford. At 25% the same income budgets $1,354 too — comfort and qualification converging by different roads.
What the rules cannot see
Neither rule knows your city, your debts, your dependents or your savings rate. In high-cost metros, households routinely and rationally exceed 30% by trading other spending away; the rules' value is as a common language and a starting fence, not a verdict on a life.
How this is calculated
Your chosen percentage × gross annual income ÷ 12; the 40× rule as income ÷ 40 monthly. The 25% and 35% reference lines use the same construction. Gross income is used because both rules are defined on gross — the dti page explores the lender's fuller version of income ratios.
Frequently asked questions
Where does the 40× rule come from?
New York landlord practice, now widespread: an applicant should earn at least 40 times the monthly rent annually. Guarantors are often held to 80×. It is a screening heuristic, not a law anywhere.
Should utilities count in the 30%?
The policy definition of housing cost includes utilities; a rent that fits at 30% before utilities can exceed it after. If your rent excludes them, budget the percentage against rent plus a realistic utility figure.
Is the 30% rule outdated?
It dates to 1969/1981 US housing policy and strains in modern high-cost cities; financial planners often prefer a full-budget approach (the 50/30/20 frame on this site puts needs — rent included — at 50% of take-home). The rule endures as a quick public yardstick, with the caveat printed here.
Rent or buy by these numbers?
The rules size the rent. Whether the same monthly figure should instead service a mortgage is a different and larger question — the rent-vs-buy calculator runs it with equity and costs counted.
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