Debt-to-Income Ratio Calculator
DTI · Mortgage qualification checker
Monthly Debt Payments
Enter your monthly debts and income to calculate your debt-to-income ratio.
Debt-to-Income Ratio
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BreakdownAmount
Total Monthly Debt—
Gross Monthly Income—
Front-End DTI (housing only)—
Back-End DTI (all debts)—
Mortgage Qualification—
To reach 36% DTI—
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What is Debt-to-Income Ratio?
Your debt-to-income ratio is total monthly debt payments divided by gross monthly income. $2,300 of payments on $6,000 of income is a 38.3% DTI. Many lenders like 36% or less, and Fannie Mae accepts up to 50% on conventional mortgages approved through its automated system. Enter your payments and income above to see your front-end and back-end ratios.
DTI (Debt-to-Income Ratio) is the percentage of your gross monthly income that goes to paying monthly debts. Lenders use it as the primary measure of your ability to manage payments. The lower your DTI, the more financial flexibility you have.
There are two types: Front-end DTI includes only housing costs (rent/mortgage, taxes, insurance). Back-end DTI includes all monthly debt payments. Most conventional mortgage lenders want front-end under 28% and back-end under 36%.
The 28/36 Rule
The standard lender guideline: housing costs should not exceed 28% of gross income (front-end), and all debts combined should not exceed 36% (back-end). FHA loans are more lenient at 31/43. VA and USDA can go higher with compensating factors like strong credit and significant savings.
How to Improve DTI
Options: Pay off small debts entirely (eliminates monthly payment), increase income (side job, raise, rental income), avoid taking on new debt before a major loan application, refinance high-rate debts to lower monthly payments. Don't close old credit cards: that doesn't help DTI but hurts credit score.
DTI vs Credit Score
DTI and credit score are separate metrics. High DTI with good credit = still hard to get approved. Low DTI with poor credit = also challenging. Lenders want both. DTI shows current debt burden; credit score shows history of payment reliability. Mortgage lenders review both extensively during underwriting.
Debt Not in DTI
Not all financial obligations count in DTI: utilities (electric, gas, internet), subscriptions, insurance (other than homeowner's), groceries, cell phone, gym memberships. Only obligated monthly debt payments count. Business debts on personal returns count; business debts on business returns sometimes don't.
DTI Limits by Loan Type
These are the program limits for back-end DTI (all debts, including the new housing payment). A lender can set a lower limit.
| Loan | Maximum back-end DTI | Notes |
|---|---|---|
| Conventional (Fannie Mae), automated | 50% | Approved through Desktop Underwriter |
| Conventional (Fannie Mae), manual | 36%, up to 45% | 45% needs the credit score and reserves in Fannie Mae's eligibility matrix |
| FHA | 31% housing / 43% total guideline | Higher ratios allowed with compensating factors |
| VA | 41% guideline | Residual income is also tested; higher ratios can be approved |
| Qualified Mortgage (CFPB) | No fixed cap | The 43% limit was replaced by a price test in 2021 (mandatory from October 2022) |
Maximum Monthly Debt by Income
Gross monthly income and the most you could spend on debt payments at common DTI limits. The 28% column is the classic ceiling for housing alone.
| Annual income | Monthly | 28% housing | 36% | 43% | 50% |
|---|---|---|---|---|---|
| $40,000 | $3,333 | $933 | $1,200 | $1,433 | $1,667 |
| $60,000 | $5,000 | $1,400 | $1,800 | $2,150 | $2,500 |
| $75,000 | $6,250 | $1,750 | $2,250 | $2,688 | $3,125 |
| $100,000 | $8,333 | $2,333 | $3,000 | $3,583 | $4,167 |
| $150,000 | $12,500 | $3,500 | $4,500 | $5,375 | $6,250 |
Worked Example: Getting Under 36%
The default figures above are $1,500 housing, $400 car, $300 student loan and $100 of card minimums on $6,000 a month: 38.3% DTI. Three ways to reach 36%:
- Cut $140 of payments. 36% of $6,000 is $2,160, so total debt has to fall from $2,300 to $2,160.
- Pay off the car. Removing the $400 payment drops DTI to 31.7%.
- Raise income. With the same $2,300 of debt you need $6,389 a month, or about $76,700 a year.
Paying down a card balance helps DTI only through the lower minimum payment, but it also helps your credit score. To see how a new payment would change things, try the how much house can I afford calculator or the debt payoff calculator.
Method and sources. DTI = total monthly debt payments ÷ gross monthly income; front-end DTI uses the housing payment only. Table values were computed from those definitions. Sources: Fannie Mae Selling Guide B3-6-02 (debt-to-income ratios) and B3-6-05 (monthly debt obligations, student loans); CFPB General QM Loan Definition final rule (price-based General QM, mandatory compliance 1 October 2022). FHA and VA figures are the standard program guidelines; lenders may apply stricter overlays. Estimates only, not a loan approval.
This calculator uses the standard 28/36 guideline. Individual lenders may use different thresholds. Loan qualification depends on credit score, employment history, assets, and other factors.
Frequently Asked Questions
Excellent: under 20%. Good: 20 to 35%. Fair: 36 to 43%. High: 44 to 50%. Very high: above 50%. For mortgage qualification, Fannie Mae allows 36% on a manually underwritten loan, up to 45% with strong credit and reserves, and up to 50% through its automated Desktop Underwriter. FHA allows higher ratios with compensating factors, and VA uses 41% as a guideline alongside a residual income test. The lower, the better: lenders offer better rates to borrowers with lower DTI.
Add all monthly debt payments: mortgage/rent + car loans + student loans + credit card minimum payments + personal loans + any other obligated monthly debts. Divide by gross monthly income (before taxes). Multiply by 100 for the percentage. Example: $2,300 monthly debts / $6,000 gross income = 38.3% DTI. Note: use gross income (before taxes), not net take-home pay.
Yes, rental income can offset DTI. Most lenders credit 75% of gross rental income (to account for vacancy and expenses). If you own rental property, the mortgage, taxes, insurance, and HOA for that property count as debts in DTI. Net rental income (75% rent - expenses) is added to qualifying income. Investment properties require documentation: lease agreements, 2 years of Schedule E tax returns.
Yes, but documentation requirements are stricter. Lenders typically use a 2-year average of net self-employment income from tax returns (Schedule C or K-1). If income is declining year-over-year, the lower year may be used. Business expenses reduce qualifying income significantly. Self-employed borrowers often use bank statement loans (12 to 24 months of bank statements averaged) instead of traditional income documentation.
It is possible. Fannie Mae's automated underwriting accepts conventional loans up to 50%, while manually underwritten conventional loans stop at 45% even with strong credit and reserves. FHA allows up to 50% DTI in some cases. Non-QM (non-qualified mortgage) lenders may approve higher DTIs but charge significantly higher rates. The better strategy: pay down debt before applying. Getting below 45% opens manual underwriting options, and a lower ratio usually means a smoother approval.
Quick wins: Pay off installment loans with small remaining balances (even $3,000 remaining may have $200+/month payment). Don't open new credit cards or take auto loans before applying for a mortgage. Avoid any financing for 6 to 12 months before major loan applications. Longer-term: increase income, aggressively pay down revolving debt. Refinancing high-payment auto loans to lower rates reduces monthly obligation. Consolidating multiple credit cards into one personal loan can reduce minimum payment total.
Yes. If student loans are in deferment, lenders still count a payment in DTI. Under Fannie Mae rules the lender can use 1% of the outstanding balance or the documented fully amortizing payment, and on an income-driven plan it can use the actual payment, even $0, if it is documented. FHA and Freddie Mac have their own formulas, so ask the lender which applies. This can significantly affect DTI for large student loan balances. Entering repayment before applying for a mortgage sometimes helps if actual payment is lower than the 1% calculation.
The following are NOT counted in DTI: utilities (electric, gas, water, internet), cell phone bill, groceries and food, insurance (health, auto, life, unless it's a debt obligation), subscriptions (streaming, gym, etc.), daycare and childcare (some lenders do include this). Only legally obligated monthly debt payments are included. Future obligations (a car you plan to buy) are not included until the loan exists.
If you co-sign a loan, that payment counts in your DTI even if the primary borrower makes every payment. You're legally obligated. This can significantly impact your ability to get your own mortgage. Exception: if the primary borrower has made 12+ months of on-time payments and you can document this, some lenders will exclude the co-signed debt from your DTI. Best practice: avoid co-signing if you plan to apply for a major loan within 12 to 24 months.
A Qualified Mortgage (QM) is a category created by the Consumer Financial Protection Bureau (CFPB) under the Dodd-Frank Act. QMs require lenders to verify the borrower's ability to repay. Key QM features: since October 2022 there is no fixed DTI cap (the old 43% limit was replaced by a test on the APR compared with the average prime offer rate), though the lender must still consider DTI or residual income; no negative amortization, no balloon payments (mostly), loan term max 30 years, points and fees capped. QMs protect lenders from certain legal liability. Non-QM loans exist for borrowers who don't qualify but typically carry higher rates.
For a mortgage application, no: your current rent is replaced by the new housing payment (principal, interest, taxes, insurance and any HOA dues), and that payment goes into the ratio. For other loans, some lenders count rent as a housing expense, so include it when you check your DTI for a car or personal loan.
Using the classic 28% housing guideline, $1,680 a month including taxes and insurance. The 36% back-end guideline caps all debts at $2,160, so if you already pay $800 a month on a car and cards, the housing payment would need to stay under $1,360. Automated conventional approvals can go up to 50% ($3,000 in total), but the payment may then squeeze your budget.