What Is the Rent-to-Income Ratio?
The rent-to-income ratio compares monthly rent with gross monthly income, expressed as a percentage. A widely cited guideline is that rent should be about 30% or less of gross income. Many landlords use a related screen, such as requiring income of at least three times the monthly rent.
Formula
Rent-to-income ratio = monthly rent ÷ gross monthly income × 100. Rent of 1,500 on income of 5,000 a month is 30%.
Limitations
The 30% figure is a rule of thumb; it does not account for other debts, local costs, or household size.
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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.