What Percentage Of Income Should Go To A Mortgage?

Two of the more important factors when it comes to how much of your monthly income should go into a mortgage are home prices and mortgage rates. While home prices aren’t climbing as fast as they were between 2020 and 2023, they remain high across the country. At the same time, current mortgage rates have seen a significant increase since the end of 2022. 

Here are a few rules you can apply to determine how much of your net income a mortgage should be.

What percentage of your income should go to your mortgage?

Every borrower’s situation is different, and it’s possible no one rule will fit you perfectly, but these are a few of the schools of thought on what percentage of income should go to mortgage payments.

28% rule

“The 28% rule is a traditional mortgage lending guideline stating that a homebuyer’s monthly mortgage payment shouldn’t exceed 28% of their gross monthly income. This includes principal, interest, taxes, and insurance,” says Reed Letson, owner of Elevation Mortgage in Colorado Springs, Colorado.

This 28% cap is based on a borrower’s front-end debt-to–income (DTI) ratio, or the amount of their monthly income — before taxes — that’s taken up by their mortgage payment.

“It’s based on decades of lending data showing that borrowers who keep their housing costs at or below this threshold are more likely to successfully manage their mortgage payments while maintaining financial stability for other necessities and savings,” Letson says.

36% rule

The 36% model is another way to determine how much of your gross income should go toward your mortgage, and it can be used in conjunction with the 28% rule. While the 28% rule refers to your front-end DTI ratio, the 36% rule refers to your back-end DTI ratio.

“The 28% cap is about your housing costs — mortgage, taxes, insurance — and the 36% is your total debt load, including things like credit cards, car loans and student loans,” says Mike Roberts, co-founder of City Creek Mortgage in Draper, Utah.

In other words, lenders prefer that no more than 28% of your income be devoted to housing expenses and no more than 36% of your income be devoted to total debt payments, including your mortgage.

43% DTI ratio

While mortgage lenders prefer your back-end DTI ratio not exceed 36%, some lenders may accept a DTI ratio up to 43%. At this level, your mortgage is still considered a qualifying mortgage, which means Fannie Mae and Freddie Mac can purchase it from your lender. Overall, though, the lower your DTI ratio, the higher your chances of getting approved for a mortgage. Your chances of approval are lower with a high DTI ratio, but you may still qualify with a strong income and credit score.

25% post-tax model

These estimates all rely on your gross income, but many experts recommend that no more than 25% of your net income — your take-home pay after taxes and other pre-tax expenses — should go toward mortgage payments. This net income model might be more helpful if something is affecting your take-home pay, like wage garnishment or aggressive retirement savings. It’s also ideal if you want a real daily sense of your cash flow.

Mortgage payments, income and today’s housing market

Today’s market rewards buyers who shop around, both for the home and for the right rate with the right lender, but many prospective homebuyers are struggling with a double whammy right now: high home prices and 30-year mortgage rates above 6% — much higher than they were a few years ago.

Americans need to earn $111,252 to afford the median-priced home, according to a February 2026 Redfin report. That’s a tough figure for the typical American worker to reach since the median weekly earnings for full-time wage and salary workers was $1,204 in 2025, equal to an annual salary of just over $62,600, according to the Bureau of Labor Statistics.

What costs make up your mortgage payment?

Your mortgage payment consists of the principal amount and any interest, taxes and insurance you pay.

How do lenders determine what you can afford?

We’ve laid out some general rules, but lenders use these and other factors to decide how much you can afford — and how much they’ll lend you. For example:

• Gross income: Your gross income is your total earnings before taxes and other deductions. Other sources of income — such as spousal support, a pension or rental income — are also included in gross income.
• DTI ratio: Lenders typically care most about your total monthly debt obligations divided by your total gross income.
• Credit score: Your credit score is a major factor lenders use to evaluate how much you can afford. In general, the higher your credit score, the lower your interest rate, which impacts how much you can feasibly spend on a home.
• Work history: To ensure you can repay your mortgage, lenders want you to have a stable source of income. You’ll typically be asked to provide evidence of employment, such as a pay stub, from at least the past two years. If you work for yourself, you’ll be asked to provide tax returns and other business records.

Other considerations for what you can afford

Costs of homeownership

Figuring out how much of your monthly income should go to a mortgage is key to choosing an affordable home. But as any homeowner can attest, the expenses of owning and maintaining a home include much more than just the mortgage, such as HOA fees and utility payments.

Other homeownership costs can include:

• Home maintenance, including an emergency fund and savings for future repairs
• Pest prevention
• Security systems

If your budget doesn’t have some wiggle room for these expenses, you may want to reconsider how much you’re willing to spend on your mortgage.

Mortgage type

The kind of mortgage you choose also impacts how much home you can afford. To find a loan that’s right for you, it’s important to explore all your options, including conventional, FHA and VA loans.

“You should have a deep-dive conversation with your loan officer about your needs, wants, and goals,” Letson says. “In order for your loan officer to help you, they need to understand everything you are trying to accomplish. Without seeing the full picture, they will not be able to properly advise you on the best loan product for your scenario.”

Ultimately, the percentage of your income for mortgage payments is just one portion of finding the right home loan for you.

Income, debt and savings

It’s important to also consider the trajectory of your income, debt and savings after you secure a mortgage. Say you qualify for a mortgage with a 43% DTI, paying $3,000 in monthly debt with $7,000 in income. The more you can shrink that monthly debt and grow your income, the easier it will be to pay off your mortgage and focus on other financial goals.

You need to take steps in both your career and your spending to ensure stability. Part of that will be having a solid savings cushion in case your income drops. Ideally, you’d want to have at 6 months’ of expenses saved. If you have a $2,500 mortgage payment, and your other monthly expenses (utilities, food, transportation, etc.) equal $2,500, you’d want to save $30,000 for a 6-month buffer. That sort of savings takes time and intention for most people, but it can be achieved with deliberate and smart choices.

Should you spend the maximum percentage of your income on a mortgage?

Even if you can get approved for a mortgage that would make your total debt load 43% — or more — of your income, you may want to reconsider. Spending so much on your mortgage could stretch your budget too thin, which can cause you undue stress and potential financial hardship. Plus, the less you have to pay for your mortgage, the more you can contribute to other financial goals, such as saving for retirement or paying off high-interest debt.

Keep in mind: Housing costs can increase over time, whether that’s due to having an adjustable-rate mortgage, paying for repairs or dealing with increasing property taxes or homeowners insurance premiums. If you start out spending as much as your lender allows, it could be challenging to cover those higher costs.

Frequently asked questions

• What happens if I take on a mortgage that’s more than I can afford?
  

  Taking on a mortgage payment that is more than you can afford may leave you with little free cash for other living expenses or emergencies. It can also put you at risk of falling behind on payments and defaulting, potentially losing your home.

• How much of your monthly income should go to your mortgage if you’re self-employed?
  

  The specific percentage of income that should go toward your mortgage payments isn’t necessarily different if you’re self-employed. However, if you’re self-employed, mortgage lenders may want to see that you have more cash reserves than an applicant with a traditional job. They also typically require at least two years of stable self-employment income.

• What other considerations determine how much house I can afford?
  

  When determining how much house you can afford, it’s important to consider the expenses of owning and maintaining a home, which involve more than just the mortgage. Don’t overlook costs such as HOA fees and utility payments, home maintenance, pest prevention, security systems and even an emergency fund for future repairs. If your budget doesn’t have some wiggle room for these expenses, you may want to reconsider how much you’re willing to spend on your mortgage.

  The kind of mortgage you choose also impacts how much home you can afford. To find a loan that’s right for you, it’s important to explore all your options, including conventional, FHA and VA loans.

Methodology

The survey on homeowner regrets was conducted between April 2-4, 2025, with a total sample size of 2,487 adults, including 1,363 who are homeowners. The survey on home affordability was conducted by YouGov Plc between March 4-6, 2025 with a total sample size of 2,373 adults, including 979 Americans who did not own a home (with or without a mortgage) but would want to own a home some day. The survey on down payments was conducted between Jan. 15-17, 2025 with a total sample size of 2,703 adults, including 1,453 who are homeowners.

The surveys were carried out online and meet rigorous quality standards. Each gathered a non-probability-based sample and employed demographic quotas and weights to better align the survey samples with the broader U.S. population.