Published: 2026-10-12
The 28/36 rule is a planning shortcut: keep the housing payment near 28 percent of gross monthly income, and keep all monthly debts near 36 percent. It is not a federal cap, and it is not a promise that a lender will approve you.
Lenders measure the same idea with a debt-to-income ratio, then apply their own limits. The Consumer Financial Protection Bureau says those limits differ by loan product and by lender. Run your income and debts through the affordability calculator and treat the result as a range to test, not as a price you have been cleared to pay.
What do the two numbers measure?
Gross monthly income is pay before taxes and other deductions. The Consumer Financial Protection Bureau (CFPB) defines debt-to-income as all monthly debt payments divided by that gross figure. Lenders use it as one measure of whether you can manage the new payment.
The front-end number looks only at housing. Count principal, interest, property taxes, and homeowners insurance. Add mortgage insurance and any homeowners association dues if you will actually owe them. Divide by gross monthly income. A result near 28 percent is the front half of the old rule of thumb.
The back-end number starts with that housing payment and adds other recurring debts: car loans, student loans, credit-card minimums, and similar installments. Divide by the same gross income. A result near 36 percent is the back half of the rule.
The CFPB's example puts this in one fraction. A $1,500 mortgage, a $100 car payment, and $400 of other debts add up to $2,000. On $6,000 of gross monthly income, debt-to-income is 33 percent. Change any bill on the top of the fraction and the percentage moves.
Is 28/36 a rule lenders must follow?
No. The CFPB says different loan products and different lenders have different DTI limits. There is no single federal percentage that sets how much house a household can carry.
Fannie Mae publishes ceilings for loans it will buy. On manually underwritten loans, the maximum total DTI is 36 percent of stable monthly income. That maximum can go to 45 percent if the borrower meets the credit score and reserve requirements in Fannie Mae's Eligibility Matrix. For files underwritten through Desktop Underwriter, the maximum allowable DTI is 50 percent. Cash-out refinances can use a tighter cap. A lender can also set a stricter overlay.
Other programs use other tests. An FHA file, a VA file, and a conventional automated file can clear at different ratios on the same income. The debt-to-income guide explains why a qualifying ratio is not a personal verdict. The loan types guide sketches how those programs differ.
How do you run 28/36 on your own income?
Use gross monthly income, not take-home pay. If you are paid every two weeks, multiply one gross check by 26 and divide by 12 so a normal month is not understated.
Multiply gross monthly income by 0.28. That product is the front-end housing ceiling under the rule of thumb. It has to cover principal, interest, taxes, insurance, and any required mortgage insurance or association dues.
Multiply the same income by 0.36. Subtract the car payment, the student loan, the card minimums, and any other debt that will still be due after closing. What remains is the housing payment that still fits inside 36 percent.
If the two ceilings disagree, the lower one binds. A large car loan often uses up the back-end number first. A household with almost no other debt often hits the front-end number first.
On $6,000 of gross monthly income, the same figure the CFPB uses in its example, 28 percent is $1,680 and 36 percent is $2,160. If other debts are $400, the back-end leaves $1,760 for housing, so the $1,680 front-end figure is tighter. If other debts are $900, the back-end leaves $1,260, and that lower number binds. These are illustrations of the rule of thumb, not a claim about a typical household.
The affordability calculator runs this from the debts and income you enter and solves for a price. Change the target ratio and the price moves. Change the rate and the price moves the other way, because a higher rate uses more of the same payment. That is arithmetic. It is not a finding that the higher price is a good idea.
Why can a qualifying ratio still feel tight?
Lenders qualify on gross income. You spend take-home pay. Taxes, retirement contributions, health insurance, childcare, and utilities never enter the standard ratio. A file can clear 36 percent of gross income and still leave little cash after payday.
Fannie Mae also wants income that is stable, documented, and reasonably expected to continue. A one-time bonus, or overtime the employer will not confirm, may not count the way a homemade budget counts it. The ratio at the kitchen table can look better than the ratio the underwriter uses.
After you have a planning price, price the payment in the mortgage calculator. If it only works when you ignore a car loan, lower the target and run it again. The first-time buyer guide puts this step in the order of the rest of the purchase.
Put your income and debts into the affordability calculator, then compare the payment with the mortgage calculator before you shop.
Those ratios use the income a lender can document. See How Lenders Verify Your Income for a Mortgage.
This article is educational and is not a loan offer or financial advice.
Sources
- Consumer Financial Protection Bureau, What is a debt-to-income ratio?: https://www.consumerfinance.gov/ask-cfpb/what-is-a-debt-to-income-ratio-en-1791/
- Fannie Mae Selling Guide, B3-6-02, Debt-to-Income Ratios (April 2, 2025): https://selling-guide.fanniemae.com/sel/b3-6-02/debt-income-ratios
- Fannie Mae Selling Guide, B3-3.1-01, General Income Information, on stable and predictable income: https://selling-guide.fanniemae.com/sel/b3-3.1-01/general-income-information