28/36 Rule Calculator

What Is the 28/36 Rule?

The 28/36 rule is a common guideline used by lenders to assess mortgage affordability. It states that a household should spend no more than 28% of its gross monthly income on housing expenses and no more than 36% on total debt, including the mortgage, credit cards, student loans, and other obligations.

This calculator checks whether a specific mortgage payment fits within those thresholds based on your income and existing debts.

How the Calculation Works

The tool evaluates two separate ratios:

• Front-end ratio (28%): Your total monthly housing payment divided by your gross monthly income. Housing costs include principal, interest, property taxes, and homeowners insurance (PITI).
• Back-end ratio (36%): Your total monthly debt payments (housing plus all other debts) divided by your gross monthly income.

If both ratios fall at or below their respective thresholds, the mortgage is considered affordable under the 28/36 guideline.

How to Use This Calculator

Enter your estimated monthly housing payment and your gross monthly income. If you have other monthly debt payments, include those as well. The calculator will instantly show whether your housing payment passes the 28% test and whether your total debt load passes the 36% test.

You can adjust the numbers to see how changes in income, housing costs, or debt affect affordability.

Understanding the Results

The output shows two status indicators:

• Housing ratio: Passes if your housing payment is 28% or less of your income.
• Total debt ratio: Passes if your total debt payments are 36% or less of your income.

If either ratio exceeds the threshold, the mortgage may be difficult to qualify for with conventional financing. Lenders may still approve loans with higher ratios depending on credit score, down payment, and compensating factors, but the 28/36 rule provides a conservative starting point.

Common Misconceptions

• The 28/36 rule is not a hard limit. Many lenders approve loans with higher ratios, especially for borrowers with strong credit or large down payments.
• Housing costs include more than the mortgage. Property taxes and insurance are part of the housing payment, not just principal and interest.
• Gross income is used, not net. The calculation uses pre-tax income, which is the standard lenders apply.

Practical Use Cases

• Pre-purchase budgeting: Estimate how much house you can afford before starting your home search.
• Loan comparison: Compare how different interest rates or down payments affect affordability.
• Debt management planning: See how paying down existing debt improves your debt-to-income ratio.