Beyond the 28% Rule: What Percentage of Your Income Should Go to Your Mortgage Today?

For years, the 28% rule has been a common starting point for thinking about mortgage affordability. The idea is simple: aim to spend no more than 28% of your gross monthly income on housing costs. For many buyers, it offered a quick way to estimate what might be manageable.

But the way people live, earn, and spend money has changed. Home prices have risen in many markets, student loan debt is more common, and interest rates don’t look the way they did a few years ago. So, does the 28% rule still apply if you live in a high-cost metro area or carry student loans? And what if your income is stable, but your other expenses aren’t typical?

This article takes a look at how much of your income should reasonably go toward a mortgage in 2026. Instead of relying on one rule, we’ll walk through practical ways to think about affordability.

Why the 28% Rule May Be Outdated

The 28% rule dates back to a time when housing costs, interest rates, and household expenses looked very different. It was designed as a general budgeting guideline, not a personalized measure of affordability.

Today, that formula can be limiting. In many areas, home prices have increased faster than incomes. Interest rates have shifted frequently and buyers are more likely to have debt and expenses that weren’t as common when the rule first gained traction.

The 28% rule can still serve as a reference point. For example, a household earning $120,000 in a high-cost metro area may struggle to find housing at 28% of income, even with strong finances. Meanwhile, a buyer earning less in a mid-income market might comfortably stay under that threshold while still meeting savings goals.

What Does an Affordable Mortgage Look Like in 2026?

An affordable mortgage is one that allows you to cover your monthly housing costs while still leaving room for savings, emergencies, and everyday life. That means looking beyond the loan payment itself.
Housing costs typically include:

• Principal and interest
• Property taxes
• Homeowners insurance
• Utilities and maintenance

Focusing only on the mortgage payment can make a home seem affordable on paper while stretching your budget in practice.

Consider a buyer earning $80,000 per year, or about $6,667 per month before taxes. Even if their mortgage payment fits within a traditional guideline, adding taxes, insurance, and utilities could push housing costs well beyond what feels comfortable month to month.

For example, 28% would be a $1,867 monthly mortgage payment, but calculating in other costs could push the expense beyond 28%. If you're curious to see what your mortgage payment may look like, try a mortgage payment calculator or dive into more mortgage education.

For individualized support, connect with a HVCU Mortgage Specialist who can guide you through the numbers and help you find rates that best suit your financial situation.

How to Calculate Your Ideal Mortgage-to-Income Ratio

Rather than relying on one rule, it helps to understand how income and debt work together when evaluating housing costs. This is where mortgage-to-income and debt-to-income calculations can be useful planning tools.

Understanding Gross vs. Net Income

Most affordability calculations use gross income, which is your earnings before taxes and deductions. This makes comparisons easier, but it doesn’t reflect what actually lands in your bank account.
For personal budgeting, net income often tells a clearer story. Knowing both numbers helps you understand where guidelines come from and how they translate to real life.

Front-End vs. Back-End Debt-to-Income Ratios

When deciding if you can afford a mortgage, two important numbers are the front-end and back-end debt-to-income ratios. The front-end ratio looks at just your housing costs, like your mortgage, property taxes, insurance, and HOA fees, compared to your gross income.

The back-end ratio includes all your debts, such as housing, car loans, credit cards, and student loans, and should stay at or below 36%. Using both ratios gives you a full picture of whether a new mortgage fits your budget and overall financial situation.

As general reference points, housing costs are often discussed around the high 20% range of gross income, while total debt may fall somewhere between the mid-30% to low-40% range. These are not hard rules.

For example:

• Gross monthly income: $6,000
• Monthly housing costs: $1,800
• Other monthly debt: $600

Front-end ratio: $1,800 ÷ $6,000 = 30%
Back-end ratio: $2,400 ÷ $6,000 = 40%

This kind of breakdown shows how other debts, like car payments or student loans, directly affect how much mortgage feels comfortable.

When Going Over 28% Might Make Sense

There are situations where spending more than 28% of income on housing can still be manageable.

This may apply to:

• Dual-income households
• Buyers with little to no other debt
• Households with strong savings and emergency funds
• Buyers with stable income and predictable expenses

In these cases, spending closer to 30% or even 35% on housing may still leave room for flexibility. The key is having a buffer. Without savings or breathing room, higher housing costs can quickly lead to feeling stretched.

Test different scenarios with mortgage calculators and other financial tools.

5 Ways to Improve Mortgage Affordability

Small adjustments to your financial profile and home search can make a big difference in how much mortgage feels comfortable over time. The goal is to create flexibility.

1. Reduce Debt Before Applying

Lowering existing debt is one of the most effective ways to improve affordability. Even modest progress can help, such as:

• Paying down high-interest credit cards

• Consolidating balances when it makes sense

• Avoiding new debt in the months leading up to an application

2. Choose the Right Mortgage Type

Different loan types are designed for different financial situations. Understanding the basics can help you find options that better match your budget.

• FHA loans often allow for lower down payments and more flexibility with credit history.

• VA loans, available to eligible service members and veterans, may offer favorable terms and reduced upfront costs.

• Contentional loans can be a strong fit for buyers with solid credit and stable income.

3. Shop for Lower Rates

Rate shopping can reduce long-term costs without changing the home you’re buying. Before applying, it can help to:

• Review your credit report and address errors

• Pay bills on time consistently

• Avoid large purchases that could affect your credit score

Check out HVCU’s current rates here.

4. Adjust Your Home Search Budget

Sometimes affordability improves by widening your options rather than increasing your budget.

This might mean:

• Looking slightly outside your initial location

• Adjusting expectations around square footage

• Prioritizing must-haves over nice-to-haves

A home that fits your life and budget today often matters more than checking every box.

5. Increase Your Down Payment

A larger down payment can lower your monthly payment and reduce the overall cost of borrowing. However, you shouldn’t drain your savings. Having an emergency fund can help you feel more secure after closing. Explore mortgage options built to support every budget at Hudson Valley Credit Union.

What If I Have a Low Income? Homeownership Is Still Possible

Earning a lower or moderate income doesn’t automatically put homeownership out of reach. The path may look different, but options exist for buyers who plan carefully and use the right tools.

The starting point is understanding what fits comfortably within your budget, rather than focusing only on home price. Several programs and loans are designed to support buyers with limited income or savings:

• FHA loans
• Down payment assistance programs
• USDA loans

HVCU also participates in the Homebuyer Dream Program, which can provide assistance toward down payment and closing costs.  Connecting with a mortgage specialist early in the process can help you understand your options.

Final Thoughts: Rules Are Just a Starting Point

The 28% rule can be helpful, but it was never meant to be the final answer.  Affordability looks different for every buyer.

Look at your full financial picture and consider not only what you can afford today, but what will still feel comfortable a few years from now. To learn more, contact a Hudson Valley Credit Union loan specialist today.

Related FAQs

What percentage of my income should my mortgage be?
There's no single number that works for everyone. Many people use the 28% rule as a reference, but affordability depends on your income, debt and overall budget.

How do I calculate how much mortgage I can afford?

Start by looking at your gross and net income, monthly debts, and total housing costs. Mortgage calculators can help estimate payments, but they work best when paired with a realistic budget.

Is the 28% rule still a good guideline?
It can be a starting point, but it shouldn’t be treated as a strict rule. Modern financial situations often require more flexibility.

What other costs should I include in my mortgage budget?
Beyond the loan payment, include property taxes, homeowners' insurance, utilities, maintenance, and savings for emergencies.

How does my DTI ratio affect my mortgage eligibility?
Your debt-to-income ratio shows how much of your income goes toward monthly debt. Lower ratios generally provide more flexibility, but context matters.

What does a mortgage pre-approval consider besides income?
Pre-approvals typically review credit history, existing debt, assets, and employment stability, not just income alone.