20/4/10 Rule Explained

The 20/4/10 rule in the U.S.: 20% down payment, 4-year max loan term, payment ≤ 10% of gross monthly income—so you don't over-borrow. Use autopremo.com affordability calculator and payment calculator. Use autopremo.com.

TL;DR 20/4/10 = 20% down, 4-year max term, payment ≤ 10% of gross income. Use autopremo.com affordability and payment calculator to see what you can afford. Use autopremo.com.

What It Means

20% down = less negative equity early. 4-year max = less total interest. 10% of income = payment fits budget. Use autopremo.com affordability calculator to model. Get your numbers at autopremo.com.

Bottom Line

20/4/10 = 20% down, 4-year max, 10% payment. Use autopremo.com affordability and payment calculator so you don't over-borrow.