The 28/36 Rule Explained: How to Know If You Can Afford a Home
What is the 28/36 rule? Use 28% housing-cost and 36% total-debt ratios as editable planning assumptions, with worked income examples from $40k to $200k.
The 28/36 rule is a planning framework that compares housing costs and total debts with gross income. This guide uses it for worked examples, not as a universal underwriting rule or approval prediction. Start with our affordability calculator and change the ratios to match your own planning assumptions.
What Is the 28/36 Rule?
The planning framework contains two calculations:
- 28% housing-cost assumption: Multiply gross monthly income by 0.28 for an illustrative housing budget.
- 36% total-debt assumption: Multiply gross monthly income by 0.36 and subtract entered recurring debts for an illustrative housing budget.
The lower result becomes the constraint in this model. It does not determine how a lender will underwrite an application.
How to Calculate Your 28/36 Ratios
Let's walk through a step-by-step calculation for a household earning $85,000 per year in 2026:
- Find Gross Monthly Income: $85,000 ÷ 12 = $7,083/month.
- Calculate 28% Front-End Limit: $7,083 × 0.28 = $1,983/month maximum PITI.
- Calculate 36% Back-End Limit: $7,083 × 0.36 = $2,550/month maximum total debt.
- Subtract Existing Debts: If you have a $450/month car and student loan payment, your available credit for housing is $2,550 − $450 = $2,100/month.
- Determine the Model Constraint: This example takes the lower of the two figures ($1,983 vs $2,100). In this case, the planning payment is $1,983.
- Convert to Loan Amount: Subtracting ~$450 for taxes and insurance leaves ~$1,533 for Principal and Interest. At a 6.8% rate over 30 years, this supports estimated max loan amount of ~$229,000.
You can convert your own maximum payment into a specific loan figure using our mortgage calculator.
28/36 Rule by Income Level: Quick Reference Tables
Here is how the 28/36 rule scales across different salary levels. Note that the "Max P&I" column estimates a $450/month reduction for taxes and insurance, which varies by state.
| Annual Income | Max PITI (28%) | Max Total Debt (36%) | Max P&I Est. |
|---|---|---|---|
| $40,000 | $933 | $1,200 | ~$483 |
| $55,000 | $1,283 | $1,650 | ~$833 |
| $70,000 | $1,633 | $2,100 | ~$1,183 |
| $85,000 | $1,983 | $2,550 | ~$1,533 |
| $100,000 | $2,333 | $3,000 | ~$1,883 |
| $125,000 | $2,917 | $3,750 | ~$2,467 |
| $150,000 | $3,500 | $4,500 | ~$3,050 |
| $200,000 | $4,667 | $6,000 | ~$4,217 |
For a planning explanation, read loan eligibility by income or run a personalized calculation with the affordability calculator. For specific salary breakdowns, try our tools for affordability on an $80,000 salary or income required for a $400k house.
The 28/36 Scenario vs. Actual Underwriting
Actual underwriting can use different income definitions, debt treatment, limits, and automated findings depending on the lender and loan program. A lender's approval also does not measure whether the payment fits personal spending, savings, and risk tolerance. Use the 28/36 figures as comparison points and review our home-affordability guide for the other costs to include.
What Happens If You Exceed the 28/36 Limits?
If your current ratios are over the goal, you have five clear levers to pull:
- Increase Income: Adding a co-borrower's income (like a spouse earning $40,000) immediately lowers both percentages.
- Pay Down Debt: Eliminating a $300 car payment frees up $300 in "back-end" capacity, which translates to roughly $44,000 in additional mortgage eligibility.
- Increase Down Payment: Increasing your down payment reduces the loan amount and therefore the PITI, improving your front-end ratio.
- Lower Property Taxes: Buying a home in a different county or state with lower local taxes directly lowers the PITI.
- Review Credit: Credit can affect a quoted rate, but pricing criteria vary. A 0.5 percentage-point rate change can be tested as an illustrative DTI sensitivity scenario.
A Practical Warning: Gross Income vs. Take-Home Pay
This is where most buyers stumble. The 28/36 rule uses gross income (before taxes), but your life runs on net income (take-home pay). For someone earning $85,000, the gross monthly is $7,083, but take-home after taxes, health insurance, and 401(k) might be only $5,400. A mortgage payment of $1,983 (28% of gross) actually represents nearly 37% of your actual spendable cash. Always stress-test your payment against your real bank account: avoid these common mortgage calculator mistakes before committing. For total clarity, start building your full home purchase budget today.
Frequently Asked Questions
What is the 28/36 rule for mortgages?
The 28/36 rule is a planning guideline that allocates 28% of gross monthly income to housing and 36% to total debt. It is not a universal underwriting rule.
How do I calculate the 28/36 rule for my income?
Multiply gross monthly income by 0.28 for the example housing budget. Multiply it by 0.36 and subtract current monthly debt payments for the example total-debt budget. Compare the lower result with your actual expenses.
Can I get a mortgage if I exceed the 28/36 rule?
Possibly. Actual debt-to-income limits and calculations vary by lender, loan program, borrower, and jurisdiction. Ask the lender which rules apply and see our loan eligibility by income guide for the inputs to gather.
What counts toward the 36% debt ratio?
For this planning example, the 36% total includes the prospective housing payment plus entered recurring debts. Lenders may define and treat obligations differently, while a personal budget must also cover living expenses omitted from DTI. Use our loan calculator to model debts.
Does the 28/36 rule predict mortgage approval?
No. It is a planning framework. Approval criteria, income definitions, debt treatment, and limits vary by lender and loan program. Check the homebuyer's playbook for the documents and quotes to compare.
Test the 28/36 Planning Scenario
Enter annual income and debts to see what the selected ratios imply, then compare the result with your full budget and actual lender criteria.