How Much House Can You Afford? The 28/36 Rule Explained

Mortgage Guides · Updated for 2026 · About an 8-minute read

Before you fall in love with a listing, it helps to know the number that matters most: how much house you can actually afford. Lenders answer that question with debt-to-income ratios, and the most famous rule of thumb is the 28/36 rule. It won't decide everything for you, but it gives you a realistic starting range and keeps you from stretching into a payment that owns your budget. Here's how it works and how to run your own numbers for 2026.

What the 28/36 Rule Actually Says

The 28/36 rule is a pair of guidelines lenders use to gauge whether a mortgage fits your income:

• The 28% front-end ratio: Your total monthly housing payment should not exceed 28% of your gross (pre-tax) monthly income.
• The 36% back-end ratio: All of your monthly debt payments combined — housing plus car loans, student loans, credit card minimums, and other obligations — should not exceed 36% of your gross monthly income.

The housing payment in these ratios isn't just principal and interest. Lenders look at PITI: principal, interest, property taxes, and homeowners insurance, plus any mortgage insurance and HOA dues. That full figure is what gets measured against the 28% line.

Why Lenders Use Debt-to-Income Ratios

Debt-to-income (DTI) ratios are a lender's shorthand for risk. The lower your DTI, the more breathing room you have to absorb a rough month, and the more likely you are to keep paying on time. The 28/36 rule reflects decades of lending experience about where most households stay comfortable.

That said, the rule is a guideline, not a hard wall. Many loan programs approve higher ratios — some conventional and government-backed loans allow back-end DTIs into the 43% to 50% range when other parts of your application are strong, such as a high credit score, a larger down payment, or significant cash reserves. Just because a lender will approve a bigger payment doesn't mean it belongs in your budget.

A Worked Example

Say your household earns $7,500 in gross monthly income. Under the 28/36 rule:

• 28% front-end: 0.28 × $7,500 = $2,100 maximum for total housing (PITI).
• 36% back-end: 0.36 × $7,500 = $2,700 maximum for all debt payments combined.

Now suppose you already pay $500 a month toward a car loan and student loans. The back-end limit says your housing plus that $500 shouldn't top $2,700, which leaves $2,200 for housing. But the front-end limit caps housing at $2,100 — so the lower of the two, $2,100, is your working ceiling. After setting aside a realistic amount for taxes and insurance, that $2,100 might support a loan in the low-to-mid $200,000s at typical 2026 rates. Change the rate, the down payment, or your other debts, and that number moves.

Run Your Own Numbers

The fastest way to turn these ratios into a home price is to work backward from a monthly payment you're comfortable with. Our free mortgage payment calculator lets you plug in a price, down payment, rate, and term to see the estimated monthly PITI — so you can nudge the numbers until the payment lands inside your 28% target. Try it at a few different down payments to see how much that lever moves your buying power; our down payment guide explains the trade-offs.

When you run the calculator, don't forget the "TI" in PITI. Property taxes and homeowners insurance vary widely by location and can add hundreds of dollars a month, especially in higher-tax or higher-insurance areas. Budgeting for them up front keeps your affordability estimate honest.

Beyond the Formula: What the Rule Leaves Out

The 28/36 rule measures income and debt, but it can't see the rest of your life. Before you commit to the top of your range, consider a few things the formula ignores: an emergency fund for the repairs that come with owning a home, retirement and other savings goals, childcare or medical costs, and how stable your income really is. A payment that technically passes the ratios can still feel tight if it leaves nothing for the unexpected.

A practical approach is to treat the 28/36 result as your ceiling, then decide how far below it you want to live. Getting pre-approved gives you a lender's official number, but you're free to shop below it. The goal isn't to buy the most house you can qualify for — it's to buy a home you can enjoy without living paycheck to paycheck.