Debt-to-income (DTI) ratio calculator
Your debt-to-income ratio is your monthly debt payments divided by your gross monthly income. Lenders look at a front-end ratio (housing only, ideally 28% or less) and a back-end ratio (all debts, ideally 36% or less). On $7,000 gross income with an $1,800 housing payment and $800 of other debts, your back-end DTI is 37.1%.
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Estimate only, not financial advice. Each lender and loan program sets its own DTI limits and counts income and debts differently.
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How DTI is calculated
back-end DTI = (housing payment + all other monthly debts) ÷ gross monthly income × 100 front-end DTI = housing payment ÷ gross monthly income × 100
The housing payment is your rent, or on a purchase your PITI (principal, interest, property tax, homeowners insurance) plus HOA dues and mortgage insurance. Other debts are the minimum monthly payments that show on your credit report: auto loans, student loans, credit cards, personal loans, plus court-ordered support. Groceries, utilities, insurance premiums and phone bills are not counted.
What lenders consider a good DTI
| Back-end DTI | How lenders see it |
|---|---|
| 36% or less | Strong, qualifies for most loans and the best pricing |
| 37% to 43% | Acceptable, with decent credit and some reserves |
| 44% to 50% | Possible on FHA or with compensating factors |
| Above 50% | Rarely approved |
The classic guideline is 28/36. FHA loans are often underwritten around 31/43 and can go higher with automated approval.
Ways to lower your DTI
- Pay off the loan with the highest payment relative to its balance, such as a car loan with 6 months left.
- Pay credit cards down: the minimum payment shrinks with the balance.
- Increase documented income, for example a raise or a co-borrower.
- Choose a longer loan term or a bigger down payment to shrink the new payment.
3 real-life examples
$7,000 income, $1,800 housing, $800 other debts
Front-end: \( \dfrac{1{,}800}{7{,}000} = \) 25.7%. Back-end: \( \dfrac{1{,}800 + 800}{7{,}000} = \) 37.1%. Housing is fine, but total debt is just over the 36% target. Paying off the $400 car loan drops the back-end ratio to 31.4%.
$5,000 income, $1,400 housing, $400 debts
Front-end: 28.0%. Back-end: \( \dfrac{1{,}400 + 400}{5{,}000} = \) 36.0%. You sit exactly on the classic 28/36 limits, so there is no room for more debt without a larger income.
$9,000 income, $3,000 housing, $1,200 debts
Front-end: 33.3%. Back-end: \( \dfrac{3{,}000 + 1{,}200}{9{,}000} = \) 46.7%. This is above the typical 43% ceiling. Cutting the housing payment to $2,500 would bring the back-end ratio to 41.1%.