What Percentage of Your Paycheck Should Go To Your Mortgage Payment?

The road to homeownership has been a challenge for many Americans—stubborn mortgage rates and inflation keep this dream out of reach for many. And for those who can afford a home, not ending up "house poor" is also key.

In other words, becoming a homeowner should not come at the expense of other essential needs. Spending too much income on a mortgage (and on costs associated with ownership) can quickly become detrimental.

Ali Zane, CEO and credit consultant at Imax Credit Repair Firm, says that when figuring out how much house you can afford, you must step back and look well beyond what the bank confidently says you can borrow.

"I recommend calculating your 'true expenses' first, because lenders are often willing to offer more money than you want to spend," he says. 

"Thinking about your future lifestyle and goals is key. So, instead of only factoring in your mortgage payment, think about all future expenses like children's education, travel, and any hobbies you want to pursue."

How much house can I afford?

While there is no one-size-fits-all rule, there are two popular schools of thought when it comes to determining how much house one can afford.

For instance, Steve Sexton, CEO of Sexton Advisory Group, explains that some experts say your mortgage shouldn't equate to more than 2 to 2.5 times your gross annual income.

However, as of May 2025, the average American household will have to pay 44.6% of their income—much more than the suggested 30%—to purchase a median-priced home, according to a Realtor.com® Affordability Report.

“Earnings have risen, but homebuying costs have risen faster, which means that adhering to affordability guidelines can feel challenging if not impossible in many housing markets across the country,” says Danielle Hale, chief economist at Realtor.com. “While a few Midwestern markets still offer a path to homeownership for the median-income household who can make a 20% down payment, in most large metros, the dream of owning a home remains out of financial reach without significant changes to either housing supply or interest rates.”

Of course, this also depends on the housing market where you live, your lifestyle needs, and your financial goals. According to the report, only three of the top 50 metro areas—Pittsburgh, Detroit, and St. Louis—are affordable for those with median incomes due to rising mortgage rates and property prices.

Sexton notes that it's also important to recognize that just because a lender approves you for a loan does not mean you can afford it.

"It is important to assess your monthly mortgage payments in relation to taxes, your other living expenses, potential house repairs and house-related costs, credit card debt, retirement contributions, child care, and more," he says.

"Without evaluating your financial situation holistically before taking on a mortgage, you run the risk of becoming house poor."

What percentage of your paycheck should go to a mortgage?

The 28% rule is a common guideline when purchasing a home. This means your monthly mortgage payment—including principal, interest, taxes, and insurance—shouldn't exceed 28% of your gross monthly pay, says Adam Koprucki, founder at RealWorldInvestor.com.

For instance, with a $100,000 yearly salary, you'd have about $8,333 each month.

"A monthly mortgage payment over $2,333 could start pushing you beyond that threshold," he says.

Rising home values and fluctuating interest rates can make it challenging to stay within this limit. As of Feb. 20, the 30-year mortgage rate stood at 6.85%, according to Freddie Mac. What’s more, the latest consumer price index, released on Feb. 12, showed that annual inflation rose to 3% in January, continuing to take a toll on Americans’ wallets.

"Stubborn inflation will likely continue to hinder any significant mortgage rate progress," says Realtor.com® senior economic research analyst Hannah Jones. "As a result, hopeful homeowners are at an all-too-familiar crossroads and must decide whether to continue renting or take the plunge into the housing market."

Against that backdrop, experts say that the 28% rule should serve as a general framework—not something set in stone, especially in the current market environment.

"Your living expenses, including total debt load and your personal financial goals, should influence your decision," adds Koprucki.

Can I get a mortgage without a job?

The short answer is yes. But know that the process might be lengthier and more complex, especially since the 2008 housing crisis.

Koprucki says that while lenders are usually interested in steady sources of income such as a full-time job, considerable assets or alternative revenue streams, like investments or rental income, could help.

"As long as you’re able to provide a potential home mortgage lender with proof that you can meet your monthly mortgage obligations regularly and on time," he adds.

In addition, making a sizeable down payment—from your own savings or a gift from a family member—can significantly help.

"Just be prepared to provide documentation showing the money is really a gift, not a loan disguised as a gift," he says.