The commonly recommended guideline is that no more than 28% of your gross monthly income should go toward your mortgage payment. This includes principal, interest, property taxes, and insurance (PITI). This is known as the 28% rule and is widely used by lenders to help ensure borrowers can manage their mortgage payments without financial strain
. Additionally, the 28/36 rule is often used in conjunction with the 28% rule. It suggests that while your mortgage payment should not exceed 28% of your gross income, your total monthly debt payments-including mortgage, credit cards, car loans, and student loans-should stay below 36% of your gross income. This helps maintain overall financial stability
. Other rules include:
- The 25% rule , which recommends spending no more than 25% of your net (after-tax) income on housing costs
- The 35/45 rule , which allows for up to 35% of pre-tax income or 45% of post-tax income to go toward total debt payments, including mortgage, typically for borrowers with strong credit and stable income
In summary, the most widely accepted and conservative guideline is to keep your mortgage payment at or below 28% of your gross income, with total debts not exceeding 36% of your gross income. This balance helps ensure affordability and financial stability
