Debt-to-Income Ratio Calculator
Enter your gross monthly income and debt payments to get the two ratios lenders check — and where you stand against their limits.
Lenders use gross (pre-tax) income and minimum required payments — not what you actually pay.
The two ratios lenders compute
The classic guideline is the 28/36 rule: housing under 28% of gross income, all debts under 36%. It is a budgeting rule of thumb, not a regulation. The limits lenders actually apply come from the loan program:
| Benchmark | Back-end DTI |
|---|---|
| Classic “healthy budget” guideline (28/36 rule) | ≤ 36% |
| Fannie Mae conventional, manually underwritten | 36%; up to 45% with required credit score & reserves |
| Fannie Mae conventional, Desktop Underwriter (DU) | up to 50% |
| FHA, manually underwritten (credit score 580+) | 43%; 47% with one compensating factor; 50% with two |
| FHA, manually underwritten (score 500–579 or none) | 43% (31% housing) |
| Federal Qualified Mortgage (QM) rule | no fixed DTI cap since 2021 |
What happened to the “43% Qualified Mortgage” rule?
You will still see “43% DTI” quoted as a legal ceiling. It used to be one: the original 2014 federal ability-to-repay rule defined a General Qualified Mortgage partly by a 43% back-end limit. The Consumer Financial Protection Bureau replaced that test in its December 2020 General QM final rule (in effect March 1, 2021; mandatory from October 1, 2022). Today’s definition in 12 CFR 1026.43(e)(2) is price-based: for a typical first-lien loan, the APR must stay less than 2.25 percentage points above the average prime offer rate (wider margins apply to smaller loans, manufactured homes and second liens). The lender still has to consider and verify your debt-to-income ratio or residual income — but the regulation no longer names a number. The 43% you meet in practice today is FHA’s base manual-underwriting limit, not the QM rule.
Two practical consequences: a 44% DTI does not by itself make a loan “non-QM,” and the ceiling that binds you is whichever program your loan is underwritten to. FHA’s matrix above governs manually underwritten loans; loans run through FHA’s TOTAL Mortgage Scorecard or Fannie Mae’s DU are judged by the automated system, within the program’s own maximum.
Worked example
Gross income $6,500/month; rent $1,800, car $350, student loans $220, card minimums $120 = $2,490 of monthly debt.
Back-end DTI: 2,490 ÷ 6,500 = 38.3% · Front-end: 1,800 ÷ 6,500 = 27.7% — above the 36% guideline and Fannie Mae’s 36% manual base, but inside its 45% manual stretch, DU’s 50% maximum and FHA’s 43% base limit.
What counts (and what doesn’t)
- Counts: rent or full mortgage payment (PITI + HOA), auto loans/leases, student loans (lenders use the actual, IDR, or ~0.5–1% of balance if deferred), minimum card payments, personal loans, court-ordered support, co-signed loans.
- Doesn’t count: utilities, groceries, insurance (except home insurance inside PITI), phone plans, subscriptions, taxes, 401(k) contributions — DTI is a debt ratio, not a budget.
- Income side: gross pay plus documentable bonus/overtime history (usually 2-year averaged), rental income (typically 75% counted), and support received if you choose to disclose it.
Moving the number before a mortgage application
- Pay a loan to zero (or down to ten or fewer payments left — Fannie Mae then lets lenders leave an installment loan out, unless it still significantly affects your ability to pay): killing a $350 car payment cuts this example’s DTI by 5.4 points, far more leverage than the same cash spread across balances.
- Don’t finance anything in the months before applying — a new car payment can erase your approval.
- Raise documented income: a raise letter or a second-job history lenders can average in.
Frequently asked questions
What is a good debt-to-income ratio?
Under 36% back-end is comfortable by the classic rule; under 28% front-end for housing. Mortgage approvals routinely happen up to 43–50% with strong credit and reserves — but living at 45% feels very different from qualifying at it.
Is DTI calculated with gross or net income?
Gross — income before taxes and deductions. That surprises people because the money “isn’t real,” but every lender formula and the limits in the table use gross. (For your own budgeting, running the same math on net pay is a sensible stress test.)
Do utilities and insurance count in DTI?
No. Only debt obligations count. The exceptions live inside the mortgage payment itself: lenders count the full PITI (principal, interest, property taxes, home insurance) plus HOA dues as your housing debt.
How do lenders count student loans in deferment?
They won’t count zero. Typical treatment: the actual payment if one shows on your credit report, your documented income-driven payment, or 0.5%–1% of the balance per month as a proxy (program-dependent: conventional 1%, FHA 0.5%).
Does DTI affect my credit score?
No — income isn’t in your credit file, so scores can’t use DTI. It’s a separate underwriting gate: score measures repayment history, DTI measures capacity. You need both to clear a mortgage approval.
Official sources
Every rate and threshold on this page comes from the issuing agency. Verify anything here against the primary source:
- Regulation Z — 12 CFR 1026.43(e)(2), Qualified mortgage defined (eCFR) — the current General QM definition: consider and verify DTI or residual income, plus a price-based APR limit (2.25 percentage points over APOR for most first liens) — no fixed DTI cap
- CFPB — General QM Loan Definition final rule (Federal Register, Dec. 29, 2020) — the rule that removed the 43% DTI limit from the General QM definition; effective March 1, 2021, mandatory compliance from October 1, 2022
- Fannie Mae Selling Guide B3-6-02, Debt-to-Income Ratios — manual underwriting maximum 36%, up to 45% with the credit score and reserves in the Eligibility Matrix; 50% maximum for DU loan casefiles
- Fannie Mae Selling Guide B3-6-05, Monthly Debt Obligations — installment debts count when more than ten payments remain; deferred student loans at 1% of the balance or a fully amortizing payment
- HUD Handbook 4000.1, FHA Single Family Housing Policy — Approvable Ratio Requirements (Manual) — the 31/43, 37/47, 40/40 and 40/50 manual-underwriting matrix and the 0.5%-of-balance deferred student loan payment (revision issued August 12, 2026)
Last reviewed: 2026-09-28 · Report an issue