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Rent cap

The default cap is 30 percent of gross income, then other debts come off.

30 percent cap

1,500

Rent capOther debts

After debts
1,250
Rent for a year
18,000
2.5× screen
2,000
3× screen
1,666.67
40 percent room
1,750

The large figure is 30 percent of gross income. The 2.5× screen divides income by 2.5, and the 3× screen divides by 3. The 40 percent room subtracts other debts from that ratio. 5000 and 250 are a cap of 1500, 1250 left, and 18000 for the year.

Why this exists

Rent past 30 percent of income is the part that squeezes everything else first. A landlord’s 2.5× and 3× screens are looser than that 30 percent cap.

This page does not remove tax or a deposit. The numbers stay in this browser.

  1. 01How to use it

    Income 5000, other debts 250, and 30 percent make a rent cap of 1500, 1250 after those debts, and 18000 for the year. Income at 2.5 times the rent allows 2000, and 3 times allows 1666.67. A 40 percent debt ratio minus 250 leaves 1750.

    The large figure is 30 percent of gross income. The 2.5× screen divides income by 2.5, and the 3× screen divides by 3. The 40 percent room subtracts other debts from that ratio. 5000 and 250 are a cap of 1500, 1250 left, and 18000 for the year.

  2. 02What you get

    1500 / 1250 / 18000.

    2000 / 1666.67 / 1750.

    Entered5000 · 1500 · 1250 · 18000

    5000 1500
    250 1250
    18000 2000
    1666.67 1750

  3. 03Worth knowing

    The large figure is 30 percent of gross income. The 2.5× screen divides income by 2.5, and the 3× screen divides by 3. The 40 percent room subtracts other debts from that ratio. 5000 and 250 are a cap of 1500, 1250 left, and 18000 for the year.

    Rent past 30 percent of income is the part that squeezes everything else first. A landlord’s 2.5× and 3× screens are looser than that 30 percent cap.

Questions

Q1500?
A5000 / 30 / 1500
Q1250?
A250 / 1250
Q2000?
A2.5 / 2000
Q1666.67?
A1666.67 / 1750

How this page works it out

The large figure is 30 percent of gross monthly income. Income 5000 times 30 divided by 100 is a rent cap of 1500. Other debts of 250 leave 1250, and 1500 times 12 is 18000 for the year.

A landlord who wants income at 2.5 times the rent is looking at 2000. At 3 times the rent the screen is 1666.67. A 40 percent debt ratio is 2000 of the 5000, and subtracting 250 leaves 1750. The 30 percent cap sits under the 2.5× screen.

This page does not remove tax or a deposit. The numbers stay in this browser.

  • # 1500
  • # 1250
  • # 18000
  • # 2.5