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

The 28/36 rule is the fastest way to estimate your home budget. Here's how it works and how to raise your limit.

Written by Jordan Ellery, Personal-finance writer · Reviewed by Priya Nadella, CPA, Certified Public Accountant (reviewer) · Updated July 2026

The 28/36 rule

The 28/36 rule is a lender rule of thumb for affordability. The 28 is your front-end ratio: your total housing payment (PITI) should be no more than 28% of your gross monthly income. The 36 is your back-end ratio: all your debt payments — housing plus car, student loans and credit-card minimums — should be no more than 36%.

Whichever limit is lower sets your budget. The affordability calculator applies both, then works backward through the amortization math to estimate the home price that fits.

Why your other debts matter so much

If you carry other debt, the 36% back-end limit usually binds first. Every $200 car payment is $200 less that can go to housing. That's why paying off a car loan or credit card can raise your home budget more than saving a larger down payment — it frees up back-end room in your DTI.

Lenders may approve you above 36% — many qualified mortgages allow up to 43% back-end DTI, and some programs stretch to 50% with strong credit and cash reserves. But borrowing to the maximum leaves little margin for emergencies.

Beyond the ratios

The 28/36 rule ignores your down payment size, your other savings, and your lifestyle costs. A comfortable budget also accounts for maintenance (budget roughly 1% of the home's value per year), rising property taxes and insurance, and your own savings goals. Treat the calculator's number as a ceiling, not a target.

Informational only — not financial or tax advice. This article is general educational information and may not reflect current figures or your individual situation. Tax and financial rules change; verify with the IRS or a qualified professional before acting.