What is the 28/36 rule?+
The 28/36 rule is a traditional guideline: spend no more than 28% of gross income on housing (front-end DTI) and no more than 36% on all debts combined (back-end DTI). Staying within these limits generally indicates healthy debt management. Many lenders allow higher DTIs today, but the 28/36 rule is a sound financial planning target.
What counts as debt in DTI?+
DTI includes all monthly minimum debt payments: mortgage/rent, car loans, student loans, credit card minimums, personal loans, and child support/alimony. It does NOT include utilities, groceries, insurance, subscriptions, or savings contributions. Only recurring debt obligations that appear on a credit report are typically counted.