The 28/36 Rule Explained
The 28/36 rule is the most widely used affordability guideline in mortgage lending. Knowing how it works lets you predict roughly what a bank will approve — and, more importantly, what you can comfortably afford.
Quick answer
Spend no more than 28% of your gross monthly income on housing (PITI), and no more than 36% on total debt payments (housing + car + student loans + credit cards).
What the two numbers mean
The 28% (front-end ratio)
Total monthly housing cost shouldn't exceed 28% of gross monthly income. Housing includes principal, interest, property taxes, homeowner's insurance, and HOA dues — known as PITI.
The 36% (back-end ratio)
Total monthly debt — including the housing payment plus all other recurring debt — shouldn't exceed 36% of gross monthly income. This is the limit lenders care most about.
Examples by income
- $50K salary ($4,167/mo gross): max housing ~$1,167; max total debt ~$1,500.
- $75K salary ($6,250/mo): max housing ~$1,750; max total debt ~$2,250.
- $100K salary ($8,333/mo): max housing ~$2,333; max total debt ~$3,000.
- $150K salary ($12,500/mo): max housing ~$3,500; max total debt ~$4,500.
Why use 28/36 instead of the bank's max?
Lenders may approve you for higher ratios — sometimes 43% back-end or more. Approval isn't the same as comfort. The 28/36 rule leaves room for retirement saving, emergencies, and lifestyle. Most financial planners suggest staying within or below it.
Common adjustments
- VA and FHA loans allow higher ratios (sometimes 41–50% back-end) but that doesn't make them comfortable.
- High-cost areas force buyers to stretch — but doing so usually means little left for other goals.
- Tight 25/35 rule (more conservative) leaves more breathing room for kids, retirement, or saving aggressively.
Use the calculator
Apply the 28/36 rule to your own income
Run your numbers and see your safe price range.
Open Affordability CalculatorFrequently Asked Questions
Is 28/36 outdated?
It's been the standard for decades and remains useful as a baseline. Some modern planners prefer 25% on housing for more flexibility.
Does it use gross or net income?
Gross — pre-tax. This is what lenders use, but if you want a more honest comfort number, recalculate against take-home pay (typically use 33% of net for housing).
Should I include retirement contributions in debt?
No — they're savings, not debt. But heavy retirement saving makes a tighter housing ratio more important.
What if I exceed 36% slightly?
Most lenders allow 38–43% in many programs. You can still qualify — but the higher you go, the less margin you have for life.
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