Debt to Income Ratio = 0.45 or 45% Debt to Income Ratio Formula – Example #2.

Generally speaking, your rent should be somewhere around 30% of your income. National and city price-to-rent ratios rise and fall over time depending on the state of the housing market. Historical Price-to-Rent Ratio. \$8,950 x 0.3 = \$2,685. The general rule is that your monthly apartment rent (excluding utilities) should not exceed 30% of your gross monthly income.

How do You Calculate the Rent to Sales Ratio?

Using this rule, calculate what your after-tax income is.

What is a good rent to income ratio? Please note this calculator is for educational purposes only and is not a denial or approval of credit. The math may be trickier, but you’ll have a much clearer sense of how much rent you can comfortably afford. Input your net (after tax) income and the calculator will display rentals up to 40% of your estimated gross income. Debt-to-income ratio (DTI) is the ratio of total debt payments divided by gross income (before tax) expressed as a percentage, usually on either a monthly or annual basis.

This means 35 percent of your income is tied up in paying debt. Using the example above -- \$2,500 in debt divided by \$7,000 in income -- you have a debt-to-income ratio of 35 percent. For example, suppose you earn \$4,000 after tax each month and you would like to spend 30% of your after-tax income on rent. However, this doesn’t mean that 30% is the only option: Experiment with other debt calculators, or explore hundreds of other calculators addressing topics … If you have a fixed salary, the calculation is pre-tax annual salary divided by 40. How to calculate your debt-to-income ratio Your debt-to-income ratio (DTI) compares how much you owe each month to how much you earn. Rent to Income Landlords typically require that your annual income is at least 40 times the monthly rent.