Debt-to-Income Ratio Calculator
Lenders use this number to decide if they'll approve you. What's yours?
Monthly Income
Monthly Debt Payments
Your Results
≤ 36% — Great, lenders love you
37-42% — Okay, but room to improve
43-49% — Stressful, pay down debt
≥ 50% — Danger zone, act now
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DTI = Total Monthly Debt Payments ÷ Gross Monthly Income
Lenders look at this to gauge risk. A 43% DTI is usually the ceiling for conventional mortgages. FHA loans allow up to 50% in some cases. If you're over 36%, paying down debt before applying for new credit will get you better rates.
Front-end vs Back-end DTI: This calculator shows back-end DTI (all debts). Some lenders also check front-end DTI — just housing costs — which should ideally be under 28%.
What DTI means and how lenders read it ▸
Your credit score gets all the attention. It's the number everyone checks, the one credit monitoring apps obsess over, the one your parents warned you about. But when you actually apply for a mortgage or car loan, there's another number that matters just as much — and you probably don't know it.
It's your Debt-to-Income ratio (DTI), and it can make or break your loan approval.
What Is DTI, Exactly?
Simple math: monthly debt payments ÷ monthly gross income = DTI percentage.
Example: You earn $5,000/month before taxes. Your debts are:
- Student loan: $350
- Car payment: $425
- Credit card minimums: $200
- Total: $975
$975 ÷ $5,000 = 19.5% DTI. That's solid.
Now add a $1,400 mortgage payment. New total: $2,375. New DTI: 47.5%. Most lenders will reject that mortgage application.
The DTI Scale Lenders Use
| DTI Range | What It Means | Mortgage Odds |
|---|---|---|
| ≤ 20% | Excellent. Low risk borrower. | Approved, best rates |
| 20–36% | Good. Comfortable debt load. | Approved, competitive rates |
| 37–43% | Okay. Approaching limit. | Approved, higher rates |
| 44–50% | High risk. Lenders wary. | Maybe, iffy |
| > 50% | Danger zone. Likely denied. | Denied |
Most mortgage lenders cap DTI at 43% for conventional loans, 50% for FHA loans. But the best rates go to borrowers under 36%.
What Counts as "Debt"?
Lenders look at recurring monthly obligations — not bills like utilities or groceries.
Included in DTI:
- Mortgage or rent payment
- Minimum credit card payments
- Student loan payments
- Auto loan / lease payments
- Personal loan payments
- Child support / alimony
- Homeowners insurance & HOA fees
- Other installment debts
Not included: Utilities, groceries, gas, insurance (health/auto), subscriptions, retirement contributions, taxes.
Two Types of DTI
Lenders calculate two versions:
- Front-end DTI: Housing costs only (rent/mortgage, insurance, taxes, HOA) ÷ gross income. Target: ≤ 28%.
- Back-end DTI: All debt payments ÷ gross income. Target: ≤ 36%.
You can pass front-end but fail back-end if you have lots of non-housing debt. That's why paying off credit cards before applying for a mortgage is smart — it lowers your back-end DTI without affecting housing costs.
How to Improve Your DTI
- Pay down debt. Every dollar of monthly payment you eliminate improves your ratio.
- Avoid new debt. Don't finance a car right before applying for a mortgage.
- Increase income. Side hustle, overtime, raise — more income lowers DTI mathematically.
- Refinance existing loans. Lower monthly payments = better DTI. (But don't extend terms recklessly.)
- Pay off small balances. Eliminating a $50/month payment is easier than a $500 one and helps just as much.
Related: How Much House Can I Afford? Realistic Guide | Budgeting Guide: 50/30/20 vs Zero-Based