Debt-to-Income Calculator
Calculate your DTI ratio to see how lenders view your borrowing capacity.
Good 43%
Max 50%+
High
What is Debt-to-Income Ratio?
DTI ratio compares your total monthly debt payments to your gross monthly income. Lenders use this metric to assess your ability to manage monthly payments and repay debts.
For example, if you earn $6,000/month and have $2,100 in monthly debt payments, your DTI is 35%.
DTI Ranges & What They Mean
Front-End vs Back-End DTI
Front-End DTI (Housing Ratio): Only includes housing costs (mortgage, taxes, insurance, HOA). Most lenders prefer this under 28%.
Back-End DTI (Total DTI): Includes all monthly debt obligations. This is the number most commonly referred to and should ideally be under 36%.
For Qualified Mortgages (QM), the back-end DTI limit is generally 43%, though some loan programs allow higher ratios with compensating factors.
How to Lower Your DTI
- Pay down existing debt: Focus on credit cards and loans with the highest payments first.
- Avoid new debt: Don’t open new credit accounts before applying for a mortgage.
- Increase your income: A raise, second job, or side income can improve your ratio.
- Refinance existing loans: Lower interest rates can reduce monthly payments.
- Pay off small balances: Eliminating a $50/month payment still improves DTI.
What DTI Doesn’t Include
- Utilities: Electric, gas, water, internet bills are not counted.
- Insurance: Health, life, and auto insurance (unless part of loan payment).
- Groceries & daily expenses: Food, gas, entertainment are excluded.
- Subscriptions: Netflix, gym memberships, etc. don’t count toward DTI.
- Income taxes: Use gross (pre-tax) income, not take-home pay.