28/36 Rule Calculator
Use this 28/36 Rule Calculator to estimate how much house you may afford using the conservative front-end and back-end debt-to-income guideline. Calculate your maximum housing payment, total debt limit, affordable mortgage amount, estimated home price, monthly payment, and affordability status.
Table of contents
Calculate your 28/36 rule affordability
Enter your gross monthly income, existing monthly debts, mortgage assumptions, taxes, insurance, and down payment. The calculator estimates your front-end ratio, back-end ratio, maximum housing payment, maximum monthly debt limit, affordable loan amount, and estimated home price.
Debt-to-income meter
| Metric | Formula | Result | What it means |
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What is the 28/36 rule of debt ratio?
The 28/36 rule is a traditional mortgage affordability guideline. It says a borrower should ideally spend no more than 28% of gross monthly income on housing costs and no more than 36% of gross monthly income on total monthly debt payments. The first number is called the front-end ratio. The second number is called the back-end ratio.
The front-end ratio focuses only on housing. In mortgage planning, housing costs usually include principal, interest, property taxes, homeowners insurance, mortgage insurance, homeowners association dues, and sometimes other required housing costs. The back-end ratio includes those housing costs plus other recurring monthly debt payments such as auto loans, student loans, credit card minimum payments, personal loans, alimony, child support obligations, and other installment debts.
The 28/36 rule is useful because it gives buyers a conservative starting point. It prevents a borrower from looking only at the house price and ignoring the monthly payment. It also prevents the mistake of focusing only on mortgage payment while forgetting existing debts. A household with no car loan and no credit card debt may have more room for housing than a household with the same income but large monthly debt payments.
This rule is not a legal lending requirement. Mortgage programs may allow different debt-to-income ratios depending on credit score, down payment, loan type, reserves, underwriting system, loan-to-value ratio, and compensating factors. However, the 28/36 guideline remains useful because it is easy to understand and relatively cautious.
28/36 rule formula
The 28/36 rule uses two separate ratios. The first ratio compares monthly housing costs with gross monthly income. The second ratio compares total monthly debts with gross monthly income. Gross monthly income means income before taxes and deductions.
Front-end ratio formula
Under the 28% guideline, the maximum recommended housing payment is:
Back-end ratio formula
Under the 36% guideline, the maximum total monthly debt is:
Therefore, the housing payment allowed by the back-end rule is:
Final housing limit formula
The final maximum housing payment is the smaller of the front-end housing limit and the back-end housing room:
Mortgage payment formula
Once the allowed housing payment is known, the calculator estimates the affordable loan amount using the standard amortizing mortgage payment formula:
Here, \(M\) is the monthly principal-and-interest payment, \(P\) is the loan amount, \(r\) is the monthly interest rate, and \(n\) is the number of monthly payments.
Loan amount from payment formula
To estimate the maximum loan amount from a permitted principal-and-interest payment, the formula can be rearranged:
How to calculate 28/36 mortgage rule — an example
Suppose a household earns $9,000 per month before taxes and has $700 in existing monthly debt payments. The 28% front-end limit is:
This means the household’s recommended maximum monthly housing payment is $2,520 under the front-end rule.
The 36% back-end total debt limit is:
Because the household already has $700 in monthly debts, the housing room under the back-end rule is:
The final allowed housing payment is the smaller of $2,520 and $2,540. Therefore, the recommended housing payment is $2,520.
If property tax, insurance, HOA, and mortgage insurance take $650 per month, then the estimated principal-and-interest budget is:
The calculator then converts that principal-and-interest budget into an estimated mortgage amount based on the interest rate and term.
What price house can I afford?
The price house you can afford depends on income, debt, mortgage rate, loan term, property taxes, insurance, homeowners association dues, mortgage insurance, down payment, credit profile, loan program, and lender underwriting. The 28/36 rule gives a conservative monthly-payment framework, but the final home price also depends heavily on interest rates and local housing costs.
Higher mortgage rates reduce buying power because more of each monthly payment goes to interest. Lower rates increase buying power because the same monthly payment can support a larger loan. Property taxes also matter. A home with high taxes can be less affordable than a similarly priced home in a lower-tax area.
Down payment affects affordability in two ways. First, a larger down payment reduces the loan amount. Second, it can reduce or eliminate mortgage insurance. However, using all available cash for a down payment can be risky if it leaves no emergency fund, repair fund, or closing-cost reserve.
What should be included in housing payment?
- Mortgage principal
- Mortgage interest
- Property taxes
- Homeowners insurance
- Mortgage insurance
- HOA dues
- Required assessments
- Flood insurance if required
Why 28/36 is useful but incomplete
The 28/36 rule does not directly include groceries, childcare, transportation, healthcare, savings goals, retirement contributions, home maintenance, utilities, or lifestyle costs. A borrower can technically pass a DTI test and still feel financially stretched. A good affordability decision should combine lender ratios with a household budget.
How to use the 28/36 Rule Calculator
- Enter gross monthly income. Use income before taxes and deductions.
- Enter existing monthly debt payments. Include recurring debts such as auto loans, student loans, credit card minimums, personal loans, and other required obligations.
- Enter your down payment. This helps estimate the affordable home price after the calculator estimates the loan amount.
- Enter mortgage rate and term. Use a realistic current mortgage rate and the loan term you are considering.
- Add property tax, insurance, PMI, and HOA. These housing costs reduce the amount available for principal and interest.
- Review the 28% and 36% limits. The calculator uses the smaller allowed housing amount from the front-end and back-end rules.
- Compare the optional target home price. If you enter a target home price, the calculator estimates whether that payment fits the rule.
- Use the output as a starting point. Confirm final affordability with a detailed budget and lender preapproval.
What counts as debt?
For DTI purposes, debts usually include recurring monthly obligations that appear on credit reports or are legally required. This can include auto loans, student loans, personal loans, credit card minimum payments, child support, alimony, and other installment debts. Utilities, groceries, subscriptions, gasoline, and entertainment are usually not counted as DTI debts, but they still affect real affordability.
What counts as income?
Income may include salary, hourly wages, bonus income, commission income, self-employment income, retirement income, pension income, Social Security income, disability income, rental income, and other stable income sources if a lender can document and verify them. For this calculator, use gross monthly income as a practical estimate.
Complete guide to the 28/36 rule
The 28/36 rule is popular because it turns mortgage affordability into two simple numbers. Housing should ideally stay at or below 28% of gross monthly income, and total debt should ideally stay at or below 36%. The rule is conservative enough to protect many buyers from becoming house poor, but simple enough for quick planning.
A buyer becomes house poor when the home payment consumes so much income that other priorities suffer. Those priorities can include emergency savings, retirement contributions, childcare, car replacement, healthcare, travel, education, and home maintenance. Mortgage affordability is not only about loan approval. It is about whether the monthly payment can fit a complete life.
The 28/36 rule also helps identify whether the problem is income, debt, home price, interest rate, or non-mortgage housing costs. If the 28% front-end limit is binding, the housing payment itself is too high relative to income. If the 36% back-end limit is binding, existing debts are limiting mortgage capacity. Paying down a car loan or reducing credit card payments may increase home affordability more than focusing only on the mortgage rate.
Current mortgage conditions matter. When rates are above 6%, the same monthly payment buys less house than it did when rates were near 3% or 4%. That means buyers may need larger down payments, lower purchase prices, longer timelines, or lower non-mortgage debt to remain within a conservative affordability range.
The rule should also be adjusted for personal context. A household with high childcare costs may need to stay below 28/36. A household with no dependents, no car payment, strong savings, stable income, and large reserves may be comfortable above the rule. A conservative calculator cannot know every household detail, so users should treat the result as a planning boundary rather than a final approval decision.
FAQs
What is the 28/36 rule?
The 28/36 rule is a mortgage affordability guideline suggesting that housing costs should be no more than 28% of gross monthly income and total monthly debt should be no more than 36% of gross monthly income.
What is the front-end ratio?
The front-end ratio compares monthly housing costs with gross monthly income.
What is the back-end ratio?
The back-end ratio compares total monthly debt payments, including housing, with gross monthly income.
Is the 28/36 rule required by lenders?
Not universally. It is a guideline. Lenders may approve loans with different debt-to-income ratios depending on the loan program, underwriting system, credit score, reserves, and other factors.
Does the 28/36 rule include taxes and insurance?
Yes, housing costs should generally include principal, interest, property taxes, homeowners insurance, mortgage insurance, HOA dues, and other required housing payments.
Can I afford more than the 28/36 rule suggests?
Possibly, but it may increase budget risk. A higher DTI can reduce flexibility for emergencies, savings, repairs, and lifestyle expenses.
Why does existing debt reduce home affordability?
Existing debt uses part of the 36% back-end debt limit. The more you already owe each month, the less room remains for a mortgage payment.
Disclaimer
This 28/36 Rule Calculator is for educational and estimation purposes only. It does not provide mortgage approval, legal advice, tax advice, lending advice, investment advice, or financial planning advice. Actual affordability depends on lender underwriting, loan program, credit score, down payment, assets, reserves, property type, taxes, insurance, PMI, HOA dues, income documentation, and market rates. Always consult a qualified mortgage professional before making a home purchase decision.