On this page
- Percentage of income for a mortgage: the quick answer
- What counts in your mortgage payment
- The 28/36 guideline and how to apply it
- What lenders allow: DTI limits by loan program
- How to choose a comfortable percentage of income for a mortgage
- How to lower the percentage of income for a mortgage
- Frequently asked questions
- Next step: see what a lender will approve
Lenders do not set one percentage of income for a mortgage. Instead, two different numbers apply: a comfort guideline, under which many buyers aim to keep the housing payment near 28% of gross monthly income, and the debt-to-income (DTI) limits lenders use to approve the loan. Housing researchers also treat a household that spends more than 30% of its income on housing as “cost burdened,” which gives you a third reference point.
For the step-by-step DTI math, see our debt-to-income ratio guide.
Percentage of income for a mortgage: the quick answer
Three numbers come up when people ask about the percentage of income for a mortgage. Because each comes from a different place, it helps to keep them apart.
| Number | What it is | Who uses it |
|---|---|---|
| 28% of gross income | Comfort target for the housing payment | A common lender guideline (28/36) |
| 30% of income | Line for “cost burdened” households | HUD researchers and Harvard’s Joint Center for Housing Studies |
| 36% to 50% of gross income | Typical maximum total DTI for approval | Set by each loan program and lender |
No agency sets a 28% limit on the housing payment, and the 30% figure is a research measure. Instead, the DTI limits decide approval. The Consumer Financial Protection Bureau notes that different loan products and lenders have different DTI limits. As a result, the share you can be approved for often runs well above the share that feels comfortable.
What counts in your mortgage payment
When a lender measures your housing payment, it uses the full monthly cost of the home. Loan officers call this PITI (principal, interest, taxes and insurance), or PITIA when association dues apply. Fannie Mae’s Selling Guide (B3-6-03) and HUD Handbook 4000.1 (II.A.5.d.vii) both list these items:
- Principal and interest: the loan payment itself.
- Property taxes: usually collected monthly through an escrow account.
- Homeowners insurance: plus flood insurance when it applies.
- Mortgage insurance: private mortgage insurance (PMI) on a conventional loan with less than 20% down, the monthly premium on an FHA loan (see our FHA MIP chart), or the annual fee on a USDA loan.
- HOA or condo dues: along with any special assessments, ground rent or second mortgage payment on the home.
So when you work out your percentage of income for a mortgage, use the full PITIA figure.
Why lenders use gross income
Lenders measure the payment against gross monthly income, which is pay before taxes and other deductions. The CFPB defines DTI as all monthly debt payments divided by gross monthly income. Each program also has its own rules on which income counts, covered in our guide to income for a mortgage.
Because take-home pay is smaller, the same payment takes a bigger bite of it. For example, say a buyer earns $6,000 a month before taxes and takes home $4,600 after taxes, retirement contributions and health insurance (an assumed figure for this illustration). A $1,680 payment is 28% of gross pay, but it is about 37% of take-home pay.
The 28/36 guideline and how to apply it
The 28/36 rule is a common lender guideline. It suggests spending no more than 28% of gross monthly income on housing (the front-end ratio) and no more than 36% on all monthly debts, housing included (the back-end ratio).
No agency sets a 28% limit today. However, the 36% figure does match one real rule: Fannie Mae’s base maximum DTI for manually underwritten loans is 36% under Selling Guide B3-6-02. Loans run through Fannie Mae’s automated system, Desktop Underwriter (DU), can go higher.
A worked example
Take a buyer with $72,000 a year in gross income, or $6,000 a month (an illustration only).
| Measure | Share of gross income | Monthly amount |
|---|---|---|
| Housing payment (front-end) | 28% | $1,680 |
| All debts, housing included (back-end) | 36% | $2,160 |
| Room left for other debts | 8% | $480 |
| Cost-burden line (HUD, JCHS) | 30% | $1,800 |
So this buyer’s car loan, student loans and card minimums would need to stay at or below $480 a month. If they already pay $550 a month on a car loan, a $1,680 housing payment would put total debts at $2,230, or about 37% of gross income. Then the buyer would either target a lower payment or pay down debt first.
What lenders allow: DTI limits by loan program
The table below gives the maximum ratios in each program’s current guide, as read in October and November 2026.
| Program | Housing ratio | Total DTI ratio | Source |
|---|---|---|---|
| Conventional (Fannie Mae), DU | No separate limit | Up to 50% | Selling Guide B3-6-02 |
| Conventional (Fannie Mae), manual | No separate limit | 36%, or up to 45% with the credit score and reserves in the Eligibility Matrix | Selling Guide B3-6-02 |
| FHA, manual, score 580 or higher | 31% (33% for Energy Efficient Homes); 37% with one compensating factor; 40% with two factors or with no discretionary debt | 43% (45% for Energy Efficient Homes); 47% with one compensating factor; 50% with two factors; 40% when the borrower has no discretionary debt | HUD 4000.1 II.A.5.d.viii |
| FHA, manual, score below 580 or none | 31% | 43% | HUD 4000.1 II.A.5.d.viii |
| VA | No separate limit | Above 41% triggers closer review | VA Pamphlet 26-7, ch. 4, topic 10 |
| USDA | 29% | 41%, with a waiver path | HB-1-3555, ch. 11 |
How each program uses its limits
Fannie Mae: Selling Guide B3-6-02 also lets lenders apply a more conservative approach, so a given lender may stop lower.
FHA: The ratios in HUD Handbook 4000.1 (Update 18, effective November 10, 2026) apply to manually underwritten loans. Compensating factors include verified cash reserves and residual income. Most FHA loans are scored through the TOTAL Mortgage Scorecard instead; the exceptions include Streamline Refinances and assumptions (4000.1 II.A.4.a.i). The handbook sets no ratio matrix for a TOTAL Accept, so the ratios in such an approval can differ from the manual table, and the lender’s own limits still apply.
VA: VA treats DTI as secondary to residual income, the net income left each month after debts and housing costs to cover family living expenses. A ratio above 41% requires close scrutiny and a supervisor’s written justification, unless residual income exceeds VA’s guideline by at least 20%.
USDA: HB-1-3555 sets 29% for housing and 41% in total. Loans that receive an Accept from USDA’s automated system (GUS) do not need a debt ratio waiver. Otherwise, a waiver can allow up to 32% and 44% when every applicant has a credit score of 680 or higher, the lender documents at least one listed compensating factor, and USDA approves the request.
Credit scores and the 43% myth
Ratios are only one part of approval. Fannie Mae removed its 620 minimum credit score for loans underwritten through DU on November 16, 2025. Still, many lenders use 620 or higher as their own rule, called an overlay.
You may also see 43% described as a legal cap on DTI. That limit no longer applies, because the CFPB’s general Qualified Mortgage rule replaced it with a price-based test.
How to choose a comfortable percentage of income for a mortgage
The gap between approval and comfort can be wide. Take the same buyer with $6,000 a month in gross income and a $400 car payment. On a DU loan, the maximum DTI is 50%, so total debts could in principle reach $3,000. That would leave room for a housing payment of up to $2,600 if DU approves the loan.
That payment is about 43% of gross income and about 57% of the $4,600 take-home pay assumed earlier. By contrast, the 28% guideline points to $1,680, which is $920 a month less. A lender’s approval shows what the loan rules permit, while your budget shows what you can carry.
Costs that DTI leaves out
Because DTI counts only debts and the housing payment, several homeownership costs fall outside it:
- Utilities.
- Repairs and maintenance.
- Commuting, childcare and other fixed household costs.
- Savings for emergencies and retirement.
Taxes and insurance can also rise after closing, even on a fixed-rate loan. Harvard’s Joint Center for Housing Studies found that median housing costs for all homeowners rose 25% from 2019 to 2024, while homeowner incomes rose 23%. So leave room in your budget for taxes, insurance and upkeep to grow.
A practical way to set your number
Start with your take-home pay and subtract your current fixed costs and savings goals. Then compare what is left to 28% of your gross income and to the most your lender says you qualify for. If the take-home figure is lower than both, use it as your percentage of income for a mortgage.
For reference, a HUD research article (PD&R Edge, July 24, 2025) notes that housing affordability generally has been defined as spending no more than 30% of monthly income on housing. Yet Harvard’s Joint Center counted 43.5 million cost-burdened households in 2024, about one-third of all households. For the whole budget, including cash to close, see how much house you can afford.
How to lower the percentage of income for a mortgage
If your target payment comes out too high, several changes can bring the share down.
Make a larger down payment. A smaller loan means a smaller principal-and-interest payment. Also, on a conventional loan, putting 20% down means PMI is not required, according to the CFPB; see how much to put down on a house.
Pay down other debts. Lower car, card or student loan payments reduce your back-end ratio, although they do not change the housing ratio. Under Fannie Mae’s rules, an installment debt with ten or fewer payments left may be left out of DTI, unless the payment significantly affects your ability to pay.
Choose a longer term. A 30-year loan has a lower monthly payment than a 15-year loan for the same amount. Still, you pay more interest over the life of the loan.
Add a co-borrower. A spouse or partner on the loan adds income to the calculation. Their debts also count, so this helps most when the co-borrower carries little debt.
Frequently asked questions
What percent of gross income should go to a mortgage?
A common guideline is 28% of gross monthly income for the full housing payment, with all debts at 36% or less. That is a convention, not a rule. Lenders approve against program DTI limits, which reach 50% on Fannie Mae loans underwritten through DU.
What percent of net income should my mortgage be?
No agency or program sets a percentage of net income for a mortgage. Lenders measure DTI against gross income, and VA adds a separate residual-income test based on income after taxes and debts. In the example above, a payment at 28% of gross pay takes about 37% of an assumed $4,600 take-home pay, so test any payment against your own budget.
Does the mortgage percent of income include taxes and insurance?
Yes. Lenders count principal, interest, property taxes, homeowners insurance, mortgage insurance and any HOA dues. So use that full figure when you work out your percentage.
Is 30 percent of income too much for a mortgage?
Not by most lending rules. Conventional and VA loans set no separate housing-payment limit, and FHA’s base housing limit is 31%. USDA’s base limit is 29%, with a waiver path. However, a HUD research article says affordability generally has been defined as spending no more than 30% of income on housing, and Harvard’s Joint Center calls households above that line cost burdened.
What is a debt-to-income ratio?
DTI is your total monthly debt payments, the new housing payment included, divided by your gross monthly income. Each loan program and lender sets its own maximum.
Next step: see what a lender will approve
Your percentage of income for a mortgage comes down to two checks: the program’s DTI limit and your own budget. Work out a payment that fits both, then ask a lender to run the numbers. A mortgage pre-approval shows the DTI a lender calculates for you and the loan amount it supports, so you can shop with a payment you have already tested.
