1. What is Rent Affordability?

Rent affordability refers to the percentage of your income that should be allocated to housing costs. The general rule is that rent should not exceed 30% of your monthly income.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• \( Rent \) — Affordable monthly rent in INR
• \( Income \) — Your monthly income in INR
• \( 0.3 \) — 30% of income guideline

Explanation: This calculation helps determine how much you can afford to spend on rent while maintaining financial stability.

3. Importance of Rent Affordability

Details: Maintaining rent within 30% of income helps ensure you have enough left for other essential expenses, savings, and discretionary spending.

4. Using the Calculator

Tips: Enter your monthly income in INR. 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: While 30% is a common guideline, your personal situation may require adjusting this percentage based on other financial obligations.

Q2: Does this include utilities?
A: The 30% typically refers to base rent only. Utilities and other housing costs should be considered separately.

Q3: How does this apply in different Indian cities?
A: In expensive cities like Mumbai, you might need to adjust the percentage due to higher housing costs relative to income.

Q4: What if my rent exceeds 30%?
A: You may need to adjust other expenses, consider roommates, or look for more affordable housing options.

Q5: Does this work for freelancers with variable income?
A: For variable income, use your average monthly income over 6-12 months for a more accurate calculation.