Debt-to-Income Ratio: The 28/36 Rule Explained

Updated July 23, 2026 · 8 min read

Before a lender approves your mortgage, they check one number above almost all others: your debt-to-income ratio (DTI). It's the single biggest factor in how much house you can borrow. Understanding the 28/36 rule puts you ahead of most first-time buyers.

What Is Debt-to-Income Ratio?

Your DTI is the percentage of your gross monthly income that goes toward paying debts. Lenders use it to gauge whether you can comfortably handle a new mortgage payment on top of your existing obligations.

The 28/36 Rule

This classic guideline breaks DTI into two ratios:

• Front-end (28%): No more than 28% of gross monthly income should go to housing costs (mortgage, property tax, insurance, HOA).
• Back-end (36%): No more than 36% should go to all debt combined (housing + car loans + student loans + credit cards).

Example: $7,000 Gross Monthly Income

How to Calculate Your DTI

Add up all your monthly debt payments, divide by your gross (pre-tax) monthly income, and multiply by 100.

Example: $2,100 in debt ÷ $7,000 income = 30% DTI.

What DTI Do Lenders Actually Accept?

While 36% is the classic target, many programs allow more. Conventional loans often approve up to 43–45%, and FHA loans can go as high as 50% with strong compensating factors like good credit or cash reserves.

How to Lower Your DTI Before Applying

• Pay down credit card balances and small loans.
• Avoid taking on new debt (no new car loans!) before closing.
• Increase income with a side stream or documented raise.
• Choose a less expensive home or larger down payment.

Check Your Numbers

See how your DTI affects your buying power with our Affordability Calculator, then estimate payments in the Mortgage Calculator.