The 28/36 rule is a classic guideline for how much housing you can afford. It uses two limits based on your gross (pre-tax) monthly income, one for housing alone and one for all your debts together.
The two ratios
- Front-end ratio (28%): your housing costs, meaning mortgage principal and interest, property taxes, homeowners insurance, and HOA dues, should be no more than 28% of gross monthly income.
- Back-end ratio (36%): housing plus all other monthly debt payments (car loans, student loans, credit card minimums) should be no more than 36%.
A worked example
Say your gross income is $6,000 a month and you pay $500 a month in other debts.
- Front-end limit: 0.28 × $6,000 = $1,680
- Back-end limit: 0.36 × $6,000 = $2,160 in total debt payments
- Room for housing after other debts: $2,160 − $500 = $1,660
Both limits must hold, so the lower number wins: your housing budget here is about $1,660 a month. That figure must cover taxes, insurance, and any HOA fees, not just the loan payment.
Where the rule bends
- Lenders often approve higher ratios for strong credit, large down payments, or cash reserves, and some loan programs set their own limits.
- The rule uses gross income, so it ignores your actual take-home pay, childcare, health costs, and savings goals.
- Being approved for a payment is not the same as being comfortable paying it.
Treat 28/36 as a conservative starting point, then stress-test the payment against your real monthly budget. This is general information, not financial advice.
Check your own numbers
The 28/36 Rule Calculator shows your front-end and back-end ratios and your maximum budgets, and the Mortgage Calculator turns a price into a full monthly payment with taxes and insurance.