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Glossary Finance

Rent-to-income ratio

The rent-to-income ratio is monthly rent divided by monthly income; a common guide is to keep it at or below 30%.

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In more detail

On $3,000 of monthly income the 30% guide suggests rent up to $900. When sharing, fair splits can follow room size: a $2,700 rent split over rooms of 150, 120 and 100 sq ft is $1,094.59, $875.68 and $729.73.

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See also

  • Glossary Debt-to-income ratio (DTI)
    The debt-to-income ratio (DTI) is your monthly debt payments divided by your gross monthly income.
  • Glossary Budget (50/30/20 rule)
    A budget is a plan for spending and saving income; the 50/30/20 rule allots 50% to needs.
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