Financial Planning for Generation X & Y Women
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Expert Q&A Archive

Should rent be included when calculating debt-to-income ratio?
When calculating the debt to income ratio should rent be included? If so, why & if not, why?
Michael A. Masiello:
expert info »
By my definition rent is an expense not a debt. I would not include it
for the ratio, but it would be included in any cash flow projections.

[Editor’s Note: Cash flow is dealt with under the section on Statement of Income and Expense in the second chapter of the Wi$eUp curriculum entitled “Money Math.” The Statement of Income and Expense is sometimes known as a cash flow statement.]

Shauna L. Roberts:
expert info »
If you are purchasing a home and are currently renting, the rent is not used in the debt-to-income, because when you purchase the home, you will not have the rent payment anymore.
Rebecca Schreiber CFP®:
expert info »
Rent should not be included in the debt-to-income ratio because it isn't debt. It is an important number for your budget, though, so that you can compare what your current rent is compared to a future housing payment. Since it is not debt, a lender will not include it in your total debt usage.
Beth Frazier:
expert info »
No, you should not include rent in your debt-to-income ratio as it is an expense, not a debt.