1. What is the Rent Affordability Rule?

The general rule of thumb is that your monthly rent should not exceed 30% of your gross monthly income. This helps ensure you have enough left for other expenses and savings.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• \( Rent \) — Affordable monthly rent in SGD
• \( Income \) — Your gross monthly income in SGD
• \( 0.3 \) — The 30% affordability ratio

Explanation: This calculation provides a conservative estimate of what you can afford while maintaining financial stability.

3. Importance of Rent Affordability

Details: Keeping rent at or below 30% of income helps prevent being "house poor" and ensures you can cover other living expenses, savings, and discretionary spending.

4. Using the Calculator

Tips: Enter your gross monthly income in SGD. The calculator will show the maximum recommended rent based on the 30% rule.

5. Frequently Asked Questions (FAQ)

Q1: Is 30% a strict rule?
A: It's a guideline. In high-cost areas like Singapore, some spend up to 40%, but this may require cutting other expenses.

Q2: Should I include bonuses in income?
A: For stability, base calculations on regular monthly income excluding bonuses which may vary.

Q3: What if my rent exceeds 30%?
A: Consider getting a roommate, finding cheaper accommodation, or increasing your income to maintain balance.

Q4: Does this include utilities?
A: The 30% typically refers to base rent. Additional costs like utilities should be budgeted separately.

Q5: How does this compare to HDB rules?
A: HDB has stricter affordability assessments, but the 30% rule remains a useful personal guideline.