Debt-to-Income Ratio Calculator
Your DTI, the way mortgage lenders figure it
- Debt-to-income (back-end)housing + all other debts
- ✓ Within 36%
- Housing ratio (front-end)housing payment ÷ income
- 25.0%
- Housing payment at 36% DTIwith your other debts
- $2,280
- Housing payment at 43% DTIwith your other debts
- $2,840
- Housing payment at 50% DTIupper limit for some programs
- $3,400
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Estimate, not a loan offer. Lenders verify income and debts and may count them differently. We may earn a commission when you click. It does not change your estimate. How we calculate · How we make money
Lenders set different DTI limits
Limits depend on the loan program, your credit and your savings. Compare lenders to see what you qualify for.
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How debt-to-income ratio works
Your debt-to-income ratio (DTI) is your monthly debt payments divided by your gross monthly income, the income before taxes. Lenders use it to judge whether you can take on a mortgage payment. TheCFPB explainsthat each lender sets its own limits.
- Back-end DTI counts your housing payment plus all other debts. This is the number most lenders focus on.
- Front-end DTI counts only the housing payment: principal, interest, property tax, insurance, PMI and HOA dues.
With the example numbers, $96,000 a year is $8,000 a month. A $2,000 housing payment plus $600 of other debts is $2,600, a back-end DTI of 32.5%, and the housing payment alone is 25%.
What counts as debt
Include payments that show up on your credit report or are court-ordered: car loans and leases, student loans, minimum credit card payments, personal loans, child support and alimony. Don't include utilities, phone bills, groceries, insurance or other living costs. Lenders use the minimum payment on your credit report, not what you actually pay.
Common DTI benchmarks
- 36% or less: the traditional guideline, comfortable for most budgets.
- Up to 43%: widely accepted, and a common cutoff for many loans.
- Up to about 50%: possible with some programs when credit, savings or down payment are strong.
To lower your DTI, pay down a balance with a high monthly payment, avoid new debt before you apply, or add a co-borrower's income. Then see what that means for price in thehome affordability calculator.
Frequently asked questions
How do you calculate debt-to-income ratio?
Add up your monthly debt payments, including the new housing payment, and divide by your gross monthly income. $2,600 of payments on $8,000 of monthly income is a DTI of 32.5%.
What is a good debt-to-income ratio?
36% or less is the traditional guideline, and many lenders accept up to 43%. Some programs go to about 50% with strong credit, savings or a larger down payment. Lower is better for your budget either way.
Does rent count in debt-to-income ratio?
For a mortgage application, lenders replace your current rent with the new mortgage payment, including tax, insurance, PMI and HOA dues. Enter the expected mortgage payment as your housing payment to see your DTI after buying.
Is DTI based on gross or net income?
Gross income, before taxes and deductions. That's why a payment that fits a lender's DTI limit can still feel tight on your take-home pay.