The general guideline for how much of your income should go toward your mortgage is the "28% rule," which recommends that your monthly mortgage payment (including principal, interest, taxes, and insurance) should be no more than 28% of your gross monthly income. For example, if you earn $10,000 per month before taxes, your mortgage payment should ideally not exceed $2,800
. Other related rules include:
- The 28/36 rule : Limits mortgage payments to 28% of gross income and total debt payments (including mortgage, car loans, credit cards, etc.) to 36% of gross income. This helps ensure you are not overextended financially
- The 35/45 rule : Suggests total debt payments should not exceed 35% of pre-tax income or 45% of post-tax income, offering a broader range for affordability
- The 25% post-tax rule : Advises that no more than 25% of your net (after-tax) income should go toward mortgage payments, which is a more conservative and cash-flow-focused approach
Lenders typically prefer your total debt-to-income ratio (DTI) — including your mortgage and other debts — to be below 36%, though some allow up to 43% under certain conditions
. In summary, aiming for about 28% of your gross monthly income on your mortgage is a widely accepted standard. However, considering your total debt load and personal financial situation is crucial to avoid financial strain
