How to use it
Enter your gross (pre-tax) monthly income, add up your existing monthly debt payments, and set your down payment and an estimated mortgage rate. The calculator returns the maximum monthly housing payment the 28/36 rule allows, and a rough home price that payment supports.
The math behind it
The 28/36 rule has two limits, and the lower one is what actually binds:
- 28% rule: housing costs ≤ 28% of gross monthly income.
- 36% rule: all debt ≤ 36% of gross income — so your housing budget is 36% of income minus your other monthly debts.
Your housing budget is the smaller of those two. To estimate a home price, the tool reserves ~20% of that payment for property taxes and insurance, treats the rest as principal and interest, and works backward through a 30-year mortgage at your rate — then adds your down payment. That last step is a ballpark: taxes, insurance, and HOA vary a lot by location, so use the monthly payment as your reliable number and the price as a starting point.
Why lenders use it
It predicts default. Above these thresholds, a job loss or medical bill is more likely to tip you into missed payments. The rule isn't a permission slip — a lender may pre-approve you for more, but the 28/36 line is where the breathing room runs out.
Frequently asked questions
Gross or take-home? Gross — it's what lenders qualify you on.
Is the home price exact? No. It's a ballpark; local taxes, insurance, and HOA move it. The monthly payment is the dependable output.