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How Much Should You Spend on Rent?

Rent affordability is a growing concern for many in Ontario. Growing populations and supply chain issues are creating a shortage in available rental units. As the demand for rental properties continues to skyrocket, so too does the cost to rent in Ontario cities. If you are looking for a place to rent, it is important to have a clear idea of what you want and what you can afford before you start looking.

How Much Should Canadians Spend on Rent?

The golden rule recommends that rent should be no more than 30% of your gross income, or income before taxes and deductions. However, in today’s rental market, this guideline might work for some but it likely won’t work for everyone.

Rent affordability in Ontario can also depend on where you want to live and the size or type of place you are looking for. For example, if you want a rental unit in a downtown metro area like Toronto or Burlington, you may be willing to pay more for rent rather than live in a smaller city like Belleville or another neighbourhood further from your desired location.

Before looking for a place to rent in Ontario, it’s important to find out how much you can afford to pay each month on your rental property.

Write a Budget

Writing a budget will give you a clear picture of your monthly income and expenses. By understanding what you earn versus what you are already spending, you can figure out how much of your income can go towards rent.

You can also find areas in your monthly spending where you can save money and reduce your risk of overspending. When developing your budget to determine your rent affordability in Ontario, follow the 50/30/20 rule.

50/30/20 Rule

The 50/30/20 rule is a guideline to help you break down how much of your net income should go towards mandatory expenses, recreational purchases and savings or investments:

Creating a budget using this rule to figure out how much you can afford to pay in rent in Ontario helps ensure you can cover your bills while saving money and having money for the fun things in life.

When creating your budget, it should include:


Knowing how much you make each month is the first step when writing your budget. In most cases, your monthly income doesn’t change. Write all your steady income sources down and how much you earn on each month.

Fixed Expenses

Fixed expenses are the mandatory bills you have each month. The amount you pay monthly usually doesn’t change. Commuting costs, insurance, phone, and utility bills are examples of fixed expenses.


Debt is also part of your mandatory expenses and will affect your rent affordability in Ontario, including loan payments, credit card, or line of credit debts

Variable Expenses

Variable expenses are those necessary costs that you have some control over. Your grocery bill or fuel expenses are examples of variable expenses.

Other Financial Considerations

If you are caring for someone else, have other income or expenses that will affect your budget or have upcoming or specific plans or events such as schooling or changing jobs that will affect your budget, make note of them so you can include these considerations in your planning.

How Much Monthly Income Should Go to Rent?

Once you know what you are looking for and have a written budget, you will have a better idea of how much of your monthly income should go towards rent. You can use this information to compare your rent affordability with what is available on the market to find a place you can afford.

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