The "housing expense ratio" is a figure that lenders use to help determine the amount of a home loan that a person is qualified for. It is calculated by dividing the sum of the monthly mortgage payment, mortgage insurance, property taxes, and homeowner's insurance by the borrower's monthly income. This number is then expressed as a percentage, and the maximum a lender will allow is generally between 26-36%. As an example, the housing expense ratio for a borrower with a monthly income of $4,000, a desired mortgage payment of $800, and combined taxes and insurance of $200 would be 25% (1,000 / 4,000 = 0.25).