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%. Real-world loan programs allow more:
| Benchmark | Back-end DTI |
|---|---|
| Classic “healthy budget” guideline | ≤ 36% |
| Qualified Mortgage general standard | ≤ 43% |
| Conventional loans (with strong compensating factors) | up to ~50% |
| FHA (strong credit/reserves) | up to ~55–57% in some approvals |
| Personal-loan lenders (typical cutoffs) | 36–50% |
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 but inside normal mortgage-approval range.
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 under 10 months remaining — many programs then exclude it): 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.
Last reviewed: 2026-08-20 · Report an issue