The two ratios lenders actually check
On $70,000/year, gross monthly income is $5,833. The classic 28/36 rule sets two caps:
| Ratio | What it caps | On $70k |
|---|---|---|
| 28% front-end | Housing costs: principal, interest, taxes, insurance (PITI) | $1,633/mo |
| 36% back-end | Housing plus all other debt payments | $2,100/mo |
Whichever cap you hit first is your limit. Debt-free? The front-end binds. Carrying a $450 car payment and $200 in cards? You only have $1,450 left for housing — the back-end now decides.
Turning $1,633/month into a house price
Assume a 30-year loan at 6.5% and about 1.4% of the home's value per year for taxes + insurance:
| Down payment | Max home price | Loan | P&I |
|---|---|---|---|
| 10% down | $238,259 | $214,433 | $1,355.36 |
| 20% down | $262,458 | $209,967 | $1,327.13 |
Bigger down payment, higher price ceiling — and at 20% you also drop PMI, which we deliberately left out above (at 10% down, PMI would shave the ceiling further by $50–150/month of budget).
Test any salary, rate and down payment against the 28/36 caps.Mortgage calculator →
Five levers that raise the number
- Kill monthly debts first. Every $100/month of debt you clear frees ~$15,000–16,000 of price at current rates.
- Shop the rate. A half-point better rate adds roughly 4–5% to your ceiling. Get at least three quotes.
- Check the taxes, not just the price. The same house price with 2.2% property tax instead of 1.0% eats about $200/month of your cap.
- Two incomes qualify together. Lenders combine gross incomes for joint applications — the caps scale with it.
- Know your real take-home. 28% of gross can be 38%+ of net. Run your actual paycheck before committing.
Approval ≠ affordability. Lenders may approve 43%+ debt-to-income. That payment services the loan; it doesn't fund retirement, repairs, or a life. The 28/36 numbers above are the comfortable ceiling for a reason.
Run your own numbers
FAQ
Is the 28/36 rule still what lenders use?
It's the classic benchmark and a safe planning target. In practice many lenders approve up to 43–50% total debt-to-income on qualified mortgages — but a payment that big leaves little room in a real budget. Treat 28/36 as the comfortable ceiling, not the legal one.
Does the $70k figure mean before or after tax?
Before tax. All lender ratios use gross income. That's why the payment can feel heavier than the math suggests — your actual take-home is what pays it.
How much does credit score change this?
Substantially, through the rate. Moving a 6.5% rate to 7.5% cuts the affordable price by roughly 8–9%; earning 5.5% instead raises it about the same. Score doesn't change the ratio math, it changes the rate that feeds it.
Do student loans reduce how much house I can buy?
Yes — they consume the back-end (36%) budget. A $400/month student loan payment reduces the room left for housing nearly dollar-for-dollar once you're near the cap.
Should I include bonuses or overtime in the $70k?
Lenders usually average variable income over two years and may discount it. For your own planning, base the ratios on income you're confident repeats.
Sources
Primary references used for the figures and rules on this page.
- Prepare to shop for a mortgage — Consumer Financial Protection Bureau
- What is a debt-to-income ratio? — Consumer Financial Protection Bureau