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25%
45%
A conservative economist will want you to
stay far away from debt and tell you to
keep housing costs below 25% of your
monthly income.
Banks are businesses,
and makes money by lending money
and being paid interest on that money.
Lenders will tell you to keep housing costs
around 45% of your monthly income.
28 36% %
BEST PRACTICE?
WHAT’S THE
THE WALL STREET JOURNAL (AND OTHER ECONOMISTS)
HAVE SAID THE BEST PRACTICE IS THE 28/36 RULE.
HOUSINGCOSTSSHOULD
BE 28% OF YOUR
MONTHLY INCOME.
ALL DEBTS INCLUDING
HOUSING SHOULD BE
36% OF YOUR MONTHLY
INCOME.
WHYIS THERE CONFLICTING ADVICEON
HOWMUCHYOU CAN SPENDONAHOME
?

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Why is there conflict?

  • 1. 25% 45% A conservative economist will want you to stay far away from debt and tell you to keep housing costs below 25% of your monthly income. Banks are businesses, and makes money by lending money and being paid interest on that money. Lenders will tell you to keep housing costs around 45% of your monthly income. 28 36% % BEST PRACTICE? WHAT’S THE THE WALL STREET JOURNAL (AND OTHER ECONOMISTS) HAVE SAID THE BEST PRACTICE IS THE 28/36 RULE. HOUSINGCOSTSSHOULD BE 28% OF YOUR MONTHLY INCOME. ALL DEBTS INCLUDING HOUSING SHOULD BE 36% OF YOUR MONTHLY INCOME. WHYIS THERE CONFLICTING ADVICEON HOWMUCHYOU CAN SPENDONAHOME ?