The 28/36 Rule for Mortgages: What Percentage of Income Should Go to Your Mortgage?
The 28/36 rule is the golden standard lenders use to determine whether you can afford a mortgage. It's not a law — it's a guideline that has guided the mortgage industry since the 1990s. Understanding it can save you from buying more house than you can handle.
What Is the 28/36 Rule?
The 28/36 rule consists of two ratios:
- Front-end ratio (28%): No more than 28% of your gross monthly income should go toward housing expenses — mortgage principal, interest, property taxes, homeowners insurance, and HOA fees.
- Back-end ratio (36%): No more than 36% of your gross monthly income should go toward all monthly debt obligations — housing plus car payments, student loans, credit card minimums, and other debts.
How the 28/36 Rule Works in Practice
Let's say your annual gross income is $72,000, or $6,000 per month:
| Ratio | Max Monthly Amount | What It Covers |
|---|---|---|
| 28% (Front-end) | $1,680 | Mortgage P&I + taxes + insurance + HOA |
| 36% (Back-end) | $2,160 | Everything above plus all other debts |
This means you can spend up to $1,680 on housing. If you already pay $400 on a car note and $150 on student loans ($550 total), your back-end limit of $2,160 means housing can only be $1,610 ($2,160 - $550). The lower number wins — in this case, $1,610, not $1,680.
Do Lenders Actually Enforce the 28/36 Rule?
Most conventional lenders allow up to 43% back-end ratio on standard conventional loans. FHA loans can go to 50% or higher with compensating factors. Here's what different loan types typically allow:
| Loan Type | Max Back-End DTI | Notes |
|---|---|---|
| Conventional | 43-45% | Some programs allow up to 50% with compensating factors |
| FHA | 43-50%+ | HUD allows higher DTI with strong compensating factors |
| VA | 43% (or residual income test) | VA uses residual income in addition to DTI |
| USDA | 43% | Total debt-to-income ratio cap |
Why the 28/36 Rule Matters for You
Even if your lender will approve a higher ratio, living at 50% debt-to-income is risky. One job loss, medical emergency, or rate hike could push you into default. The 28/36 rule exists as a safety buffer — sticking to it keeps you financially resilient.
Use our mortgage affordability calculator to see exactly what you can afford within the 28/36 rule guidelines:
Try the Mortgage Affordability Calculator →What Counts as "Housing Expenses"? (Front-End)
Your monthly housing payment isn't just the mortgage principal and interest. Lenders look at PITI:
- Principal — the portion that pays down your loan balance
- Interest — the interest portion of your payment
- Taxes — your monthly property tax escrow
- Insurance — homeowners insurance (also PMI if down payment is under 20%)
- HOA fees — if your property has homeowner association dues
What Counts as "Total Debt"? (Back-End)
Your back-end ratio includes all your monthly debt obligations:
- Mortgage or rent payment
- Auto loans and lease payments
- Student loan payments
- Credit card minimum payments
- Child support or alimony
- Personal loans
- Any recurring debt with a payment obligation
What's not included: groceries, utilities, dining out, entertainment, or insurance premiums that aren't tied to your mortgage. These are living expenses, not debts.
Can You Buy a House With a Higher DTI?
Yes — but it comes with trade-offs:
- Higher interest rates: Lenders see higher DTI as higher risk
- Stricter underwriting: You'll need a higher credit score, larger down payment, or more reserves
- Less flexibility: If rates go up or income drops, you could be squeezed
The sweet spot is keeping your back-end DTI between 25-33%. That leaves room for life surprises and lifestyle spending without feeling cash-strapped.
How to Lower Your DTI Before Applying
- Pay down existing debt: Even a $500 reduction in monthly debt obligations can qualify you for a larger mortgage.
- Increase your income: Get a raise, pick up a side gig, or have a co-borrower with income.
- Delay your purchase: Pay off a car loan or consolidate credit cards first.
- Remove co-signer obligations: If you're co-signing for someone else's debt, that counts against you.
28/36 Rule vs. What Actually Feels Affordable
Just because you qualify for a certain mortgage doesn't mean you should take it. Many people stretch to the maximum and end up "house poor" — spending their entire paycheck on housing with nothing left for savings, investing, or living.
Bottom Line
The 28/36 rule isn't a hard limit — it's a framework for healthy homeownership. Lenders may approve you at higher ratios, but the stress of carrying too much debt can ruin your financial future. Use our affordability calculator to find the right number for your situation, not the maximum the bank will lend you.