This House Fits
Housing numbers without the sales pitch
What is the 28/36 rule?
It is a guideline, not a law. Housing stays near 28% of pretax monthly income. Housing plus other monthly debts stays near 36%. A lender can still approve a higher ratio. Higher is not automatically a house that fits.
The two percentages
28% is the front-end idea: principal, interest, property tax, insurance, and often HOA and PMI, compared with pretax monthly income.
36% is the back-end idea: that housing number plus other minimum debts you already pay—car loans, student loans, credit cards, child support. Not groceries. Not utilities.
Both use pretax income. Neither is take-home pay.
Why lenders go past 36%
Many conventional files allow total DTI near 43%. Some programs go higher when credit, reserves, or other factors look strong. That answers “can we get paid back?” It does not answer “what is left after food and gas?”
This House Fits labels the 28/36 band as comfortable, a higher lender-style cap as stretch, and a still-higher band as tight. Tight can be approvable and still a bad month.
A simple picture
Pretax income $150,000 is $12,500 a month. 28% is $3,500 for housing. 36% is $4,500 for housing plus debts. If debts already take $1,500, housing under 36% is $3,000—not $4,500.
If a lender will accept 43%, housing plus debts can rise to about $5,375. That extra room is stretch, not comfort. Cash left still comes from take-home, not from $12,500 gross.
How to use it here
- Read 28/36 as a starting fence, not a target to max out.
- If debts already eat the 36% cap, the comfortable price can be $0. That is the math, not a moral score.
- After you have a price, check cash left from take-home. That is the second test.
More on that second test: take-home vs what a lender allows.
Estimate only. Not a lender, pre-approval, or financial advice. Confirm numbers before you make an offer.