## What is the 28 percent cap on a mortgage?

This 28 percent cap centers on what’s known as the front-end ratio, or the borrower’s total housing costs compared to their income. The 36 percent model is another way to determine how much of your income should go towards your mortgage, and can be used in conjunction with the 28 percent rule.

## What is the 28% rule for mortgage payments?

The 28% rule states that you should spend 28% or less of your monthly gross income on your mortgage payment (e.g. principal, interest, taxes and insurance). To determine how much you can afford using this rule, multiply your monthly gross income by 28%.

## What percentage of my income should go toward my mortgage payments?

Aim to keep your mortgage payment at or below 28 percent of your pretax monthly income. Aim to keep your total debt payments at or below 40 percent of your pretax monthly income. Note that 40 percent should be a maximum.

## How much mortgage debt can you afford?

With the 35% / 45% model, your total monthly debt, including your mortgage payment, shouldn’t be more than 35% of your pre-tax income, or 45% more than your after-tax income. To calculate how much you can afford with this model, determine your gross income before taxes and multiply it by 35%.