1. What is Rent Affordability?

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

2. How Does the Calculator Work?

The calculator uses the standard affordability formula:

Where:

• \( Rent \) — Affordable monthly rent amount
• \( Income \) — Gross monthly income before taxes
• \( 0.3 \) — 30% affordability threshold

Explanation: This calculation helps determine the maximum rent you can afford while maintaining financial stability.

3. Importance of Rent Affordability

Details: Maintaining rent at or below 30% of income helps ensure you have enough money left for other essential expenses like food, transportation, and savings.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: Is the 30% rule before or after tax?
A: The 30% rule typically applies to gross income (before taxes), but some experts recommend using net income for more accurate budgeting.

Q2: What if I can't find housing at 30% of my income?
A: In high-cost areas, many people spend more than 30%. In these cases, you may need to adjust other budget categories or consider shared housing.

Q3: Does this include utilities?
A: The 30% rule typically refers to rent only. Utilities and other housing costs should be budgeted separately.

Q4: How does this apply to share houses?
A: For shared housing, calculate your portion of the rent based on your income share.

Q5: Is this calculator specific to Australia?
A: While the 30% rule is universal, this calculator uses AUD currency and is tailored for the Australian rental market.