Debt-to-Income Calculator
Enter your monthly gross income and total monthly debt payments. The calculator shows your DTI ratio and maximum recommended housing payment.
DTI Ratio:
Remaining Income:
Max Housing Payment (28% rule):
Annual Gross Income:
Debt-to-Income Ratio Calculator — Know Your DTI Before Applying for a Loan
Your debt-to-income (DTI) ratio is one of the most important numbers lenders look at when you apply for a mortgage, car loan, or credit card. It measures how much of your monthly gross income goes toward paying debts. The lower your DTI, the better your chances of getting approved — and getting a favorable interest rate.
How to Calculate DTI Ratio
The DTI formula is straightforward:
DTI Ratio = (Total Monthly Debt Payments ÷ Monthly Gross Income) × 100
Example: You earn $6,000/month gross and pay $1,800 in total monthly debts (rent, car loan, student loans, credit cards):
DTI = ($1,800 ÷ $6,000) × 100 = 30%
What Counts as Debt?
Monthly debt payments that lenders include in your DTI calculation:
- Minimum credit card payments
- Car loan or lease payments
- Student loan payments
- Personal loan payments
- Child support or alimony
- Mortgage or rent payments (for back-end DTI)
Not included: utilities, groceries, phone bills, insurance premiums, subscriptions, or savings contributions.
DTI Ratio Ranges and What They Mean
| DTI Range | Rating | Loan Approval Likelihood |
|---|---|---|
| Under 20% | Excellent | Very likely — best rates available |
| 20–35% | Good | Likely — manageable debt level |
| 36–43% | Fair | Possible — upper limit for many mortgages |
| 43–50% | High | Difficult — may need compensating factors |
| Over 50% | Very High | Unlikely — focus on debt reduction first |
The 28/36 Rule Explained
Most conventional lenders follow the 28/36 rule:
- Front-end ratio (28%): Your housing costs (mortgage, taxes, insurance) should not exceed 28% of gross monthly income.
- Back-end ratio (36%): Your total debt payments (housing + all other debts) should not exceed 36% of gross monthly income.
Example: With a $7,000 monthly gross income:
- Maximum housing payment: $7,000 × 0.28 = $1,960
- Maximum total debt: $7,000 × 0.36 = $2,520
DTI Requirements by Loan Type
| Loan Type | Maximum DTI | Notes |
|---|---|---|
| Conventional mortgage | 36–45% | 43% is the standard QM limit |
| FHA loan | 43–50% | Up to 57% with compensating factors |
| VA loan | 41% | No hard limit but 41% is the guideline |
| USDA loan | 41% | 29% front-end, 41% back-end |
| Personal loan | 35–40% | Varies widely by lender |
| Auto loan | 36–50% | Subprime lenders may accept higher |
How to Lower Your DTI
- Pay down existing debt: Focus on high-interest credit cards first (avalanche method) or smallest balances first (snowball method).
- Increase income: Ask for a raise, take on side work, or add a secondary income source.
- Avoid new debt: Don't open new credit accounts before applying for a mortgage.
- Refinance existing loans: Lower monthly payments through longer terms or lower rates.
- Consolidate debt: Combine multiple payments into one lower monthly payment.
Frequently Asked Questions
What is a good debt-to-income ratio?
A DTI of 35% or lower is considered good by most lenders. Under 20% is excellent. For mortgage qualification, most conventional loans require a DTI of 43% or less, though some programs allow up to 50%.
How does DTI affect mortgage approval?
DTI is one of the top factors lenders evaluate. A high DTI (above 43%) makes it difficult to qualify for conventional mortgages. Even if approved, a higher DTI usually means higher interest rates and less favorable terms.
Does rent count in DTI?
Current rent is not included in DTI calculations when applying for a mortgage (since the mortgage will replace rent). However, if you're applying for other loans, some lenders may consider rent as part of your monthly obligations.
What is the difference between front-end and back-end DTI?
Front-end DTI includes only housing costs (mortgage, property tax, insurance). Back-end DTI includes housing costs plus all other monthly debt payments (car loans, student loans, credit cards, etc.). Lenders look at both.
Can I get a mortgage with a 50% DTI?
It's possible but difficult. FHA loans may allow DTIs up to 50-57% with compensating factors like strong credit scores, large cash reserves, or a large down payment. Conventional loans rarely approve above 45%.
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