What Is the 28/36 Rule?

The 28/36 rule is the lending guideline behind most answers to "how much house can I afford": spend no more than 28% of your gross monthly income on housing, and no more than 36% on all debt payments combined — housing plus car loans, student loans, credit card minimums, everything with a required monthly payment. Two numbers, one sentence, and it's the skeleton inside nearly every affordability calculator on the internet, including ours.

The two numbers, precisely

28% — the housing number. "Housing" means the whole monthly cost of the roof: mortgage principal and interest, property taxes, homeowners insurance, and any PMI or HOA dues. Lenders call this the front-end ratio.

36% — the total-debt number. Everything in the 28% bucket, plus the required monthly payment on every other debt you carry. Lenders call this the back-end ratio, or your debt-to-income ratio. Whichever of the two limits you hit first is your ceiling — carrying a lot of other debt shrinks what's left for a house, which is the rule's whole point.

A worked example

Take a $75,000 salary — $6,250 a month gross. The 28% limit puts your housing budget at $1,750 a month; the 36% limit caps all debt at $2,250 a month. With a $400 car payment, the back-end leaves $2,250 − $400 = $1,850 for housing, so the front-end $1,750 still governs. Raise the other debts to $700 a month, though, and the back-end leaves only $1,550 — now the debts, not the salary, set the ceiling. The affordability calculator runs both limits on your numbers and tells you which one is binding; if the answer is "your debts," the debt payoff calculator is the honest place to start, because every $100 of monthly minimums you retire buys back $100 of monthly housing budget.

What lenders actually do with it

28/36 is a guideline, not a law, and lenders routinely approve loans above it — qualification limits on the back-end ratio commonly run well past 36%, depending on the loan type, your credit, and your down payment. The CFPB's Ask CFPB library explains how debt-to-income is assessed in practice. The catch: an approval is the lender's judgment of what you can repay, not what you can comfortably live on. The gap between those two is exactly why a conservative guideline survives — banks will approve more than is comfortable, and the 28/36 rule is the brake you apply yourself.

Where the rule falls short

Honest limits, because it has them. It's built on gross income, so it ignores how much of your paycheck actually arrives after taxes, health premiums, and retirement contributions. It counts debts but not obligations — childcare, insurance, or supporting family can dwarf a car payment and appear nowhere in the ratio. And in high-cost metros the 28% line can be simply unreachable, at which point the rule is a warning label rather than a plan. Treat it as a ceiling, not a target: a mortgage at 27.9% of gross income is still a very large commitment.

This article is general information, not personalized financial advice. How we write and review articles is covered in the editorial note on our About page.