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What Percent of My Income Should Go Towards Mortgage Payment?

October 12th, 2022 | 4 min. read

What Percent of My Income Should Go Towards Mortgage Payment?

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When it’s time to make mortgage payments you want to make sure you have enough to pay your monthly mortgage and loan payments plus monthly expenses while also saving...

bubble- mortgage payment

Phew – that’s a lot to factor. So… what is the magic number?!?

You might even ask: When it comes to a mortgage payment, what percent of my monthly income should I budget for? Is there a specific percentage that lenders recommend? How can I know how much to afford each month without putting too much financial pressure on myself?

These are all valid questions and today we're going to tackle them! 


here's a look at what we'll cover


how much of my monthly income should go towards a mortgage? 

One of the most important things to consider when buying a home is how much of your income you should be spent on your mortgage.  To help determine this, you can:

  • Calculate your take-home pay: This is the total amount of money you earn each month before taxes and other deductions are taken out.
  • Estimate your monthly expenses: Once you have your gross monthly income, you’ll need to estimate your monthly expenses. This includes things like your mortgage payment, insurance, food, utilities, and any other regular bills that you have.
  • Determine your cash flow: After subtracting your monthly expenses from your gross monthly income, you will be left with your monthly cash flow. This will give you an idea of how much money you have left over each month after all your bills are paid.

Once you have an idea of how much money you have leftover you can plug and play some numbers using a mortgage calculator to help you determine the loan amount you may be able to afford. And we have just the thing:

Mortgage Payment Calculator


rules & models

There are some rules and models you can follow to help you determine how much mortgage you can afford. Some of the following methods are what lenders use to help determine how much a borrower can afford when getting a mortgage


28% gross income rule

25% post-tax model

35/45 debt model


what factors determine how much house i can afford? 


debt-to-income ratio (dti)

credit score

proof of income

down payment


how can i lower my monthly mortgage payments?

shop around for the best interest rates and terms

get a shorter loan term

make a larger down payment

refinance your mortgage

get rid of pmi

make extra payments

improve your credit score


am i ready for a mortgage? 

When determining how much to put towards a mortgage, it's important to consider your overall financial picture. You don't want to put too much financial pressure on yourself by committing to a mortgage payment that you can't afford.

Bubble - Hands out for house with lenderMortgage lenders will typically want to see that your monthly mortgage payment is no more than 28% of your gross monthly income. So, if you're looking at a $1,000 monthly mortgage payment, it’ll be best to have a gross monthly income of at least $3,571 to comfortably afford that mortgage payment.


Obviously, the more income you have, the easier it will be to afford a higher mortgage payment. But even if your income isn't extremely high, you may still be able to afford a higher mortgage payment by cutting back on other expenses. Here are some more tips on how much house you can afford>


how can i start my home buying journey?

First, you need to figure out which home loan is right for you.  Check out the following article for a list of mortgage options you could qualify for and its benefits: 

Find Which Mortgage Option Is Right for You

Once you know the mortgage that is right for you and you're serious about moving forward, then it's time to get pre-approved! Getting pre-approved for a mortgage is a crucial first step in the home-buying process. By getting pre-approved, you'll have a better idea of how much you can afford to spend on your new home. In addition, getting pre-approved will help you to avoid any unexpected financial surprises down the road.

Learn More About Pre-Approvals

If you have any questions, our Mortgage Loan Officers are here for you. You can send an email, give us a call at 704.375.0183 x 1525, or visit any of our branches



As the Content Specialist and author of the Learning & Guidance Center, Yanna enjoys motivating others by uncovering all that's possible in the world of finance. From financial tips and tricks to ultimate guides and comparison charts, she is obsessed with finding ways to help readers excel in their journey towards financial freedom.

learning & guidance

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Wondering how much house you can afford? Knowing can save you from spending most of your paycheck on home expenses. Here's what you need to know.

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How Do I Choose the Best Mortgage Product for Me?

Unsure of which mortgage product is best for you? Here's a breakdown of each type of mortgage, so you can make the best decision for your unique situation.

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