Rent affordability calculator

As managers we use this number in reverse: a tenant whose rent is above a third of their take-home is a tenant who will struggle in month four. The 25, 30, and 35 percent tiers are the comfortable, standard, and stretch lines.

Owners use it to sanity-check an applicant’s declared income against the asking rent. Tenants use it before they commit. Either way, it is the honest number, in any currency.

What it does

• Three tiers: comfortable (25%), standard (30%), stretch (35%)
• Currency aware: INR, USD, GBP, EUR, AED, SGD
• A quick screening check for owners evaluating tenant applications
• No signup, nothing stored

Where the 30 percent rule comes from, and why it still holds

The idea that rent should stay under 30 percent of income is older than most people renting today. It traces to American housing policy: the Brooke Amendment of 1969 capped public housing rent at a quarter of income, later raised to 30 percent, and HUD has used that line as the definition of affordability ever since. The number crossed over into general use because it kept proving itself: households above it cut food, savings, and healthcare to make rent.

India never legislated a rent-to-income line, but the same arithmetic shows up everywhere money is underwritten here. Banks cap total EMIs at roughly 40 to 50 percent of net income (the FOIR test) precisely because fixed obligations above that level make households fragile. Rent is a fixed obligation with none of an EMI's upside, so the prudent ceiling sits lower.

As managers, we use the rule in reverse. A tenant whose rent is above a third of take-home is a tenant who will struggle in month four, and a struggling tenant becomes a late payer, then an early vacancy. The 30 percent line is not a moral judgment. It is pattern recognition from thousands of tenancies.

Three tiers, because one number lies

A single "affordable rent" figure hides the real decision, so this calculator gives three.

• Comfortable: 25 percent of take-home. At this level you save, absorb surprises, and the rent never dictates your month. This is the tier to target if your income is variable or you are early in a career.
• Standard: 30 percent. The textbook ceiling. Most stable salaried tenants land here and manage fine, provided the deposit did not empty their savings on the way in.
• Stretch: 35 percent. Above this, the data is consistent: bills, food, and savings all get squeezed, and one bad month cascades. Take this tier only with a specific reason, a confirmed raise, a short commitment, or a flat that removes other costs like a long commute.

One framing matters more than the percentages: these tiers apply to your share of the rent, not the flat's headline rent. A ₹60,000 flat split between two people is a ₹30,000 decision each. That is why a tenant with a ₹1 lakh take-home shops in a very different market once flatmates enter the picture, and why the bill splitter sits next to this tool.

How to use the calculator honestly

1. Enter take-home, not CTC. The number that actually hits your bank after tax, PF, and every deduction. Indian salary structures inflate the headline; a ₹24 lakh CTC can be a ₹1.4 lakh monthly credit. Using CTC quietly moves you a full tier up the risk ladder.
2. Pick the currency you are paid in. The calculator handles INR, USD, GBP, EUR, AED, and SGD, which makes it usable for people paid in Dubai or Singapore budgeting for a flat in India, and for owners screening such tenants.
3. Pick the city. It does not change the math; it points you at the right market when you go looking for matches and flatmates.
4. Read all three tiers against your life, not your salary alone. EMIs, school fees, and remittances home are fixed obligations too. If you already carry a car EMI of 10 percent of income, your honest rent ceiling drops by about that much.

Nothing you type is stored or sent anywhere. It is arithmetic, on your device, in ten seconds.

The mistakes that cost money

• Budgeting on gross income. The most common error and the most expensive. The 30 percent line was always a net-income rule.
• Ignoring the deposit. Mumbai convention is 3 to 6 months of rent; Bengaluru has run as high as 10 months. A deposit that drains your emergency fund makes even a "comfortable" rent fragile, because the cushion that made it comfortable is gone.
• Forgetting what rent does not include. Society maintenance can add ₹3,000 to ₹15,000 a month in newer buildings, sometimes billed separately. Ask what the rent excludes before comparing flats; the listing comparison tool has a row for exactly this.
• Skipping the one-time costs. Brokerage (one month is the norm in most metros), movers, and the overlap month if notice periods do not line up. Year one of a tenancy costs 14 to 15 months of rent, not 12.
• Ignoring escalation. The standard renewal bump is 5 to 10 percent a year. A rent at 34 percent of income today is at 37 percent after one renewal unless income moves too.
• Stretching for a flat to impress a landlord or a feed. Rent-poor is a real condition. It looks like a nice balcony and feels like declining every plan by the 20th of the month.

For owners: the same number, used as a screen

Owners should run this calculator on every serious applicant, because the affordability rule is also a default-risk rule. The discipline is simple: ask for proof of income, then check that your asking rent sits at or below a third of the applicant's verified take-home.

Verified is the working word. Practical checks: the last three salary slips, matched against bank credits for the same months; for self-employed applicants, the ITR acknowledgment and a few months of bank statements. A tenant at 28 percent of verified income with a modest deposit is a better risk than one at 45 percent offering an extra deposit, because deposits run out and ratios do not.

Be honest with yourself in the other direction too. If every qualified applicant is below your asking rent, the market is telling you the price, not the applicants. Repricing two thousand rupees down beats a two-month vacancy in every spreadsheet we have ever run.

Screening tenants when you live abroad

For NRI owners, the affordability screen matters more, not less, because you cannot drop by to sort out a payment problem in person. A tenancy that fails in month six costs an overseas owner a notice cycle, a re-letting, and often a flight. The cheapest fix is at selection: insist on income proof, run the one-third check, and do not let a broker's "very good family" substitute for arithmetic.

Two adjustments when screening from abroad. First, do the verification over documents and a video call rather than trusting summaries; salary slips and bank statements scan and send in minutes. Second, weight payment history over deposit size, and ask for rent by bank transfer into your NRO account so the trail builds itself. Our guide to managing tenants from abroad covers the full screening-to-collection loop, and the NRI rental income tax guide explains what happens to that rent after it lands.

Where this fits when 66 MG Road manages the property

Tenant screening is part of the letting work we do for managed properties: income verification against the asking rent, document checks, and a recommendation with the numbers attached, so the owner approves a tenant knowing the ratio, not just the name. The one-third rule in this calculator is the same screen our team applies. If you would rather not run this from another time zone, that is what the management service is for; what it costs is on the pricing page.

Common questions

What percentage of income should rent be?

The standard line is 30 percent of net take-home. Below 25 percent is comfortable; above 35 percent is where tenants consistently fall behind. As a screening rule, an owner should want the asking rent at or below a third of the applicant's verified take-home.

Should I calculate on gross salary or take-home?

Take-home, always. The 30 percent rule was built on net income, and Indian CTC structures overstate what actually reaches the bank. Use the monthly credit after tax, PF, and every deduction.

Does the rule apply to my share of a shared flat?

Yes, and that is the useful part. The tiers apply to your share of the rent, not the flat's headline figure. A ₹60,000 flat split two ways is a ₹30,000 decision for each person, which puts better flats within a sensible budget.

How should owners verify a tenant's income?

Ask for the last three salary slips and match them against bank credits for the same months. For self-employed applicants, use the ITR acknowledgment plus bank statements. Then check the asking rent sits at or below a third of that verified take-home.

What costs does rent not capture?

The deposit (3 to 6 months in Mumbai, historically up to 10 in Bengaluru), society maintenance if billed separately, brokerage of about one month, moving costs, and annual escalation of 5 to 10 percent at renewal. Year one typically costs 14 to 15 months of rent.

Which currencies does the calculator support?

INR, USD, GBP, EUR, AED, and SGD. That covers the common cases: tenants paid in India, and people earning in Dubai, Singapore, the UK, Europe, or the US budgeting for an Indian flat or screening tenants for one.

Is anything I enter stored?

No. There is no signup and nothing is saved or sent anywhere. The calculation runs on your device and disappears when you leave.

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