1. What is Affordable Rent?

Affordable rent is generally defined as housing that costs no more than 30% of a household's gross income. In Australia, this benchmark is commonly used to assess housing affordability.

2. How Does the Calculator Work?

The calculator uses the standard affordability formula:

Where:

• Monthly Income — Your total gross monthly income before tax
• 0.3 — The standard affordability ratio (30% of income)

Explanation: This calculation helps determine the maximum rent you should pay to maintain financial stability while covering other living expenses.

3. Importance of Rent Affordability

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

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: Is the 30% rule realistic in all Australian cities?
A: In high-cost cities like Sydney, many renters exceed this benchmark, but it remains the ideal target for financial health.

Q2: Should I include bonuses in my monthly income?
A: Only include regular, guaranteed income. Bonuses or irregular income shouldn't be counted unless they're consistent.

Q3: Does this include utilities?
A: The 30% typically refers to base rent only. Additional housing costs like utilities should be budgeted separately.

Q4: What if my rent exceeds 30% of income?
A: Consider finding roommates, moving to a more affordable area, or looking for ways to increase your income.

Q5: How does this compare to Australian rental standards?
A: Many Australian rental applications require proof that rent won't exceed 30-35% of your income.