October DealsAmazon USOctober deal check: compare before you payAmazon US: current deals, useful picks and tech finds.Check DealsSlow PC?RecommendedPC slow today? Run a repair scan before it gets worseResolve common Windows issues and optimize system performance.Scan NowOctober DealsAmazon USDeal season is back - check today's better picksAmazon US: current deals, useful picks and tech finds.See Picks×
Skip to content
Bettesworth Construction
debt-to-income ratio

What Is the 28/36 Rule of Thumb for Mortgages?

The 28/36 rule is a budgeting guideline, not a mortgage approval standard. Learn how its income calculations differ from a lender’s DTI and what costs to include.

By Bettesworth Construction Team 3 min read
Special offer. See more information about Outbyte and uninstall instructions. Please review EULA and Privacy policy.

The 28/36 rule is a U.S. mortgage budgeting guideline: aim to keep monthly housing costs at or below 28% of gross income, and monthly debt at or below 36% of net income. It is a starting estimate—not a lender’s standard debt-to-income (DTI) calculation or a universal mortgage-approval cutoff.

How the 28/36 rule works

Fannie Mae describes the 28% guideline as a way to estimate a manageable monthly mortgage expense: multiply gross monthly income by 0.28. The 36% guideline compares monthly debt with net monthly income. The debt figure includes the mortgage, car payments, credit-card debt and loan payments, but not utilities. Fannie Mae cautions that the figures are for a general idea of affordability, because many factors affect what a household can afford. Fannie Mae’s consumer guide presents these as rules of thumb, not approval requirements.

Calculate the 28% housing guideline

Start with gross monthly income—income before taxes and other deductions—and multiply it by 0.28. For example, if gross household income is $8,000 a month, the calculation is $8,000 × 0.28 = $2,240. That is a rough monthly housing-cost target under this guideline, not a promise that a particular mortgage payment will be affordable or approved.

Calculate the 36% debt guideline

For the consumer rule, compare the household’s monthly debt payments with net monthly income, meaning take-home income after deductions. The 36% figure is the suggested upper share for monthly debt, including the mortgage and other stated debt payments. Do not treat that calculation as equivalent to the DTI a lender will use: lender underwriting generally calculates DTI using qualifying gross income and obligations defined by the loan rules.

Special offer. See more information about Outbyte and uninstall instructions. Please review EULA and Privacy policy.
#1 Best Overall
Calculated Industries 3405 Real Estate Master IIIx Residential Real Estate Finance Calculator | Clearly-Labeled Function Keys | Simplest Operation | Solves Payments, Amortizations, ARMs, Combos, More
  • DEDICATED FUNCTION KEYS for Quick Financial Solutions: Clearly labeled function keys enable you to quickly and confidently provide financial answers and options for your clients, whether in the office, in the car or at an open house. Compare loan options and provide payment solutions to give your client choices
  • INSTANT FINANCIAL PROBLEM SOLVING: Solve the financial questions your clients have whether they are buyers, investors or renters; increase your perceived professionalism and close more home sales by quickly answering real estate finance problems including remaining balances
  • RESIDENTIAL REAL ESTATE FINANCE TERMS: Keys labeled in residential real estate finance terms like Loan AMT, Int, Term, PMT; Calculator is super easy to use to determine a mortgage loan that works for your client
  • VERSATILE LOAN CALCULATION OPTIONS: Calculate 80:10:10 or 80:15:5 combo loans at the press of a button; check to see if ARMs or bi-weekly loans, quarterly payments or if interest-only payments are the answer; giving your client more choices
  • COMES COMPLETE: Comes with a protective slide cover, quick reference guide, pocket user's guide, two long-life batteries, and 1-year warranty

Why a lender’s DTI calculation is different

Fannie Mae defines DTI as total monthly obligations divided by the total monthly income of borrowers whose income is used to qualify. Its calculation includes the qualifying mortgage payment and other long-term and significant short-term debts. The housing obligation can include principal, interest, taxes, insurance and assessments (PITIA), along with any applicable qualifying payment amount. Other obligations can include installment and mortgage debt, revolving accounts, leases, certain alimony or child-support payments, recurring monthly obligations and net rental losses. Some small short-term debts may count if they materially affect the borrower’s ability to meet obligations. See Fannie Mae’s Selling Guide DTI guidance.

The lender’s DTI is not a complete household budget. Fannie Mae’s liability guidance identifies obligations such as leases, real-estate loans, HELOCs, alimony and child support, maintenance payments and other recurring debts. It does not treat items such as taxes, FICA, some retirement contributions, commuting costs, union dues and voluntary deductions as liabilities in that DTI calculation. Those costs still affect how much money a household has available, so account for them when deciding what payment is sustainable. Fannie Mae’s monthly debt-obligations guidance explains which liabilities it examines.

Rank #2
Calculated Industries 3400 Pocket Real Estate Master Financial Calculator
  • Loan Amortization and Remaining Balances
  • Instant Principal, Interest, Interest Only and Total Payments
  • Future Values
  • Date math function

Why 36% is not a universal approval cutoff

The 36% figure has two distinct uses: it appears in the consumer rule of thumb, and it is also Fannie Mae’s general maximum DTI for manually underwritten loans. Under Fannie Mae’s guide, the manual-underwriting maximum may rise to 45% when specified credit-score and reserve requirements are met. For loan casefiles underwritten through Desktop Underwriter, Fannie Mae allows a maximum DTI of 50%. These are Fannie Mae underwriting rules, not limits that apply to every lender or mortgage program. The applicable requirements depend on the loan and underwriting path. Fannie Mae’s current DTI guidance sets out those thresholds.

Federal ability-to-repay rules do not establish one DTI ratio that all creditors must use. Regulation Z requires creditors to consider DTI or residual income as part of the ability-to-repay assessment, while allowing consideration of other factors such as assets and residual income. A consumer guideline or one agency’s underwriting limit therefore cannot determine approval on its own. See the CFPB’s Regulation Z, 12 CFR § 1026.43.

Special offer. See more information about Outbyte and uninstall instructions. Please review EULA and Privacy policy.
Rank #3
Sale
Calculated Industries 3415 Qualifier Plus IIIx Advanced Real Estate Mortgage Finance Calculator | Simple Operation | Buyer Pre-Qualifying | Solves Payments, Amortization, ARMs, Combos, FHA, VA, More
  • SPEAKS YOUR LANGUAGE: Keys clearly labeled in residential mortgage finance terms like Loan AMT, Int, Term, PMT. This industry-standard calculator is super easy to use on all realty financing matters from finding a loan that works for your client to considering trust deeds investments, or finding remaining balances or balloon payments and much more
  • CONFIDENTLY AND EASILY SOLVES: All your clients' financial questions whether they are buyers, sellers, investors or renters. Increase your perceived professionalism as a new agent, experienced broker or seasoned loan officer. Close more home sales and impress your clients with fast, accurate answers to all their real estate finance questions
  • DEDICATED BUYER QUALIFYING KEYS: Enter client's income, debt and expenses to pre-qualify them to only show properties they can afford. Include tax, insurance and mortgage insurance then compare loan options and payment solutions to give your client choices before they make an offer to buy
  • FIGURE OUT THE RIGHT LOAN: At the press of a button for jumbo, conventional, FHA/VA, or even 80:10:10 or 80:15:5 combo loans; check to see if ARMs or bi-weekly loans, quarterly payments or if interest-only payments are the answer; giving your client more choices; easily perform what if loan or tvm calculations Find loan amount, term, interest or PITI or PI payments
  • BECOME AN INVALUABLE RESOURCE: Reduce your clients' confusion and uncertainty; ensuring they are able to make a purchase offer; knowing they can afford the down payment; and determining which is the right loan for them. Date-math for listings and contracts too. Comes with a protective slide cover, quick reference guide, pocket User's Guide, and long-life batteries
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Support on Ko-Fi

How to use the rule when planning to buy

  1. Estimate a housing target. Convert gross annual income to gross monthly income, then multiply by 0.28. Treat the result as an initial monthly housing guideline.
  2. List current monthly debts. Compare them with the consumer rule’s 36% of net-income guideline, but remember that a lender generally uses qualifying gross income and lender-defined obligations for formal DTI.
  3. Budget for costs beyond the mortgage payment. Include down payment, property taxes, insurance, maintenance and fees. Also account for utilities and other regular household costs that may not appear in a lender’s DTI calculation.
  4. Refine the estimate. Use an affordability calculator and discuss prequalification with a lender to understand how your income, debts, assets, documentation and loan program affect the numbers. Fannie Mae also offers a free homebuyer education course through its homebuyer resources.

Fannie Mae’s consumer percentages are from its 2022 guide; the underwriting figures above are from its Selling Guide dated April 2, 2025. Regulation Z is cited from the CFPB’s January 1, 2024 annual-edition text.

Best Value
CATIGA Financial Calculator Business Analyst Master, TVM, IRR, NPV, Cash Flow, Amortization & Break-Even, Perfect for Real Estate, Banking, Accounting & Finance Professionals, 10-Digit LCD, CF-300
  • PROFESSIONAL FINANCIAL CALCULATOR : Built-in TVM, IRR, NPV. Engineered for business analysts, real estate investors, accountants, and finance students.
  • ADVANCED CASH FLOW & AMORTIZATION : Execute time value of money, break-even analysis, depreciation schedules, and bond pricing. Trusted for professional exam prep", MBA coursework, and banking certifications.
  • CATIGA CF-300 : Flip-open hard case with a snap-close design for a secure fit. Compact and portable: designed for daily professional use in office, classroom, or on-site.
  • ALL-IN-ONE FOR PROFESSIONALS : From NPV/IRR for real estate analysis to statistical calculations for business analysts. Handles probability, linear regression, and complex financial formulas.
  • MORTGAGE, LOAN & INVESTMENT CALCULATOR : Covers bond pricing, loan amortization, investment analysis, and exam-level computations. Your go-to accounting calculator, business calculator, and real estate calculator in one device.
Rank #4
Calculated Industries 43430 Qualifier Plus IIIfx Desktop PRO Calculator
  • SPEAKS YOUR LANGUAGE: Keys clearly labeled in residential mortgage finance terms like Loan Amt, Int, Term, Pmt; this industry-standard calculator is super easy to use on all realty financing matters from finding a loan that works for your client to considering trust deeds investments, or finding remaining balances or balloon payments and more
  • CONFIDENTLY AND EASILY SOLVE: Clients' financial questions whether they're buyers, sellers, investors or renters. Increase your perceived professionalism as a new agent, experienced broker or seasoned loan officer. Close more home sales and impress your clients with fast, accurate answers to all their real estate finance questions from PITI Payments to IRR, NPV and Cashflows
  • DEDICATED BUYER QUALIFYING KEYS: Enter client's income, debt and expenses to pre-qualify them to only show properties they can afford. Include tax, insurance and mortgage insurance then compare loan options and payment solutions to give your client choices before they make an offer to buy
  • FIGURE OUT THE RIGHT LOAN: For your client at the press of a button for jumbo, conventional, FHA/VA, or even 80:10:10 or 80:15:5 combo loans; check to see if ARMs or bi-weekly loans, quarterly payments or if interest-only payments are the answer; giving your client more choices; easily perform what if loan or TVM calculations find loan amount, term, interest or PITI or PI payments
  • BECOME AN INVALUABLE RESOURCE: To your clients by reducing their confusion and uncertainty; ensuring they are able to make a purchase offer; knowing they can afford the down payment; and determining which is the right loan for them. Date-math for listings and contracts too. Comes with a protective slide cover, quick reference guide, pocket user's guide, and long-life battery

Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.

Leave a Reply

Your email address will not be published. Required fields are marked *

Special offer. See more information about Outbyte and uninstall instructions. Please review EULA and Privacy policy.

More from the Site Office

Recommended PC Tool
Recommended PC Tool
Outdated Drivers Are Slowing You DownFree scan - exact matches
Windows Errors? Fix Them Before They SpreadFree repair scan

Two free Windows tools

One Free Minute Could Fix That PC

Before you go - each of these free tools takes about a minute and tackles what quietly slows a Windows PC down.

Special offer. View Outbyte info, uninstall instructions, EULA, and Privacy Policy.