The 28/36 guideline
- 28%: total housing costs (mortgage, property tax, insurance, mortgage insurance, HOA) under 28% of gross monthly income.
- 36%: all monthly debt payments, including housing, under 36% of gross monthly income.
Many lenders approve higher ratios, especially for FHA loans. That does not mean you should borrow that much.
What goes into the monthly cost
| Cost | Notes |
|---|---|
| Principal and interest | Depends on price, down payment, rate and term |
| Property tax | Varies hugely by state and county |
| Homeowners insurance | Higher in areas with storms, wildfire or flood risk |
| Mortgage insurance | If you put down less than 20% on most loans |
| HOA fees | For many condos and planned communities |
| Maintenance | A rough rule is 1% to 2% of the price per year |
Work it out
Use our affordability calculator, then try prices in the mortgage calculator.
