28/36 Rule Calculator

The 28/36 rule is a mortgage planning guideline built around two debt-to-income checks. The first, called the front-end ratio, compares the monthly housing payment with gross monthly income. The second, called the back-end ratio, compares housing plus other monthly debt with gross monthly income. This calculator reports both ratios, the 28% housing limit, the 36% total debt limit, and the dollar margin above or below each threshold.

This page is different from a broad budget calculator. A budget starts with take-home pay and includes groceries, utilities, childcare, savings, insurance, entertainment, and irregular costs. The 28/36 rule starts with gross income and focuses narrowly on housing and debt obligations, which is closer to the way lenders discuss debt-to-income. For more mortgage context, compare the result with the mortgage calculator, the home-affordability calculator, and the debt-to-income calculator.

How to use this calculator

Enter gross monthly income first. Gross means income before taxes and payroll deductions. If you are paid annually, divide salary by 12. If you are paid hourly, estimate a normal monthly amount from expected hours. If a second job, bonus, or commission is irregular, be conservative unless a lender has told you exactly how it will be counted.

Next, enter monthly housing cost. For a buyer, this should include the full housing payment you want to test: mortgage principal and interest, property taxes, homeowners insurance, mortgage insurance, and HOA dues if applicable. For a renter, use rent plus mandatory monthly housing charges. Do not omit property tax or insurance estimates just because they are escrowed; they still affect affordability.

Finally, enter other monthly debt. Include auto loans, student loans, personal loans, credit card minimum payments, installment plans, and similar required obligations. Do not include groceries, utilities, retirement contributions, streaming services, or voluntary savings transfers. Those items matter, but they are not the debts this calculator is measuring.

Formula

The front-end ratio is:

$\text{front-end ratio} = \frac{\text{monthly housing cost}}{\text{gross monthly income}} \times 100$

The back-end ratio is:

$\text{back-end ratio} = \frac{\text{monthly housing cost} + \text{other monthly debt}}{\text{gross monthly income}} \times 100$

The guideline caps are:

$\text{maximum housing cost} = 0.28 \times \text{gross monthly income}$

$\text{maximum total debt} = 0.36 \times \text{gross monthly income}$

The calculator also reports margins:

$\text{housing margin} = \text{maximum housing cost} - \text{monthly housing cost}$

$\text{total debt margin} = \text{maximum total debt} - \left(\text{monthly housing cost} + \text{other monthly debt}\right)$

If a margin is negative, the label changes to an over-limit amount. The form rejects zero or negative income and negative debt values.

Example: using 28/36 rule

Suppose gross monthly income is $8,000, monthly housing cost is $2,000, and other monthly debt is $500, matching the default form values. Total monthly debt is $2,500. The front-end ratio is $2,000 divided by $8,000, or 25%. The back-end ratio is $2,500 divided by $8,000, or 31.25%.

The maximum housing cost under the 28% limit is $8,000 multiplied by 0.28, which equals $2,240. The maximum total debt under the 36% limit is $8,000 multiplied by 0.36, which equals $2,880. Housing is $240 under the front-end cap. Total debt is $380 under the back-end cap. Because 25% is less than or equal to 28% and 31.25% is less than or equal to 36%, the calculator’s note says the housing and total debt payments fit inside the 28/36 guideline.

Now change the housing cost to $2,600 while keeping income and other debt the same. The front-end ratio becomes 32.5%, and total debt becomes $3,100. The back-end ratio becomes 38.75%. The calculator would show housing over the 28% limit and total debt over the 36% limit, making the proposed payment a much tighter fit.

How to apply the result

Use the 28/36 rule before shopping at the top of a preapproval range. A preapproval may reflect lender rules, but your lived budget includes repairs, moving costs, furniture, utilities, childcare, transportation, and emergency savings. Passing the rule does not make a payment comfortable; it only says the tested payment is within a common planning guideline.

When only the front-end ratio fails, housing itself is the pressure point. You may need a lower price, larger down payment, lower rate, lower taxes, cheaper insurance, fewer HOA dues, or a longer timeline. When the front-end ratio passes but the back-end ratio fails, other debt is the constraint. Paying down a car loan or credit card may improve affordability more than changing the home price.

Be careful with gross income. A household can pass 28/36 and still feel squeezed if payroll taxes, health insurance, retirement contributions, or childcare consume a large share of take-home pay. After checking the ratios, run the payment through a monthly budget and keep a cash reserve for repairs and vacancies if the property is not owner-occupied.

Tips and common mistakes

• Use gross monthly income, not take-home pay.
• Include taxes, insurance, mortgage insurance, and HOA dues in housing.
• Use minimum required debt payments for the other debt field.
• Remember that utilities and maintenance still matter even though they are outside the ratio.
• Treat the result as a screen, not a promise of approval.
• Compare several interest rate and down payment scenarios before committing.

Sources

• Consumer Financial Protection Bureau, What is a debt-to-income ratio? — explanation of DTI and monthly debt obligations.
• Consumer Financial Protection Bureau, Mortgages — consumer mortgage education and shopping guidance.
• Fannie Mae, HomeView homeownership education — educational material on preparing for mortgage borrowing and homeownership.
• Freddie Mac, Primary Mortgage Market Survey — mortgage-rate context that can affect affordability calculations.