DTI Ratio Calculator
Calculate your debt-to-income (DTI) ratio to see if you qualify for a mortgage or other loans. Lenders typically require DTI below 43%.
What is a DTI Ratio Calculator?
The DTI (Debt-to-Income) Ratio Calculator helps you determine what percentage of your monthly gross income goes toward paying debts. This critical metric is used by mortgage lenders, banks, and financial institutions to assess your ability to manage monthly payments and repay borrowed money. A lower DTI ratio indicates you have a good balance between debt and income, making you a more attractive borrower.
💡 Key Benefit: Know if you'll qualify for a mortgage before applying. Most conventional loans require a back-end DTI below 43%, and knowing your ratio helps you understand if you need to pay down debt or increase income before applying.
DTI Ratio Calculator
Calculate your debt-to-income (DTI) ratio to see if you qualify for a mortgage or other loans. Lenders typically require DTI below 43%.
Total monthly income before taxes and deductions
Mortgage payment, property tax, insurance (PITI)
Car loans, credit cards, student loans, personal loans, etc.
Enter values and click Calculate
Your results will appear here
When to Use This Calculator
Use this calculator when applying for a mortgage, refinancing your home, seeking an auto loan, or any major credit application. It's also valuable for personal financial planning to ensure you're not overextended with debt. Check your DTI before major purchases to understand if you can afford additional monthly obligations.
Who Benefits
Homebuyers, homeowners considering refinancing, anyone applying for significant loans, financial planners, and individuals working to improve their creditworthiness all benefit from understanding their DTI ratio. Real estate professionals often recommend clients check their DTI before starting the home shopping process.
How to Use This Calculator
Follow these simple steps to get accurate results:
- 1Enter Your Monthly Gross Income
Input your total monthly income before taxes and deductions. Include salary, bonuses, commissions, rental income, alimony, and any other regular income sources.
- 2Add Monthly Housing Costs
Enter your total housing payment including mortgage principal and interest, property taxes, homeowner's insurance, and HOA fees (PITI). If you're shopping for a home, estimate based on your target monthly payment.
- 3List Other Monthly Debts
Include minimum payments on credit cards, car loans, student loans, personal loans, and any other recurring debt obligations. Do not include utilities, groceries, or other living expenses.
- 4Review Your Results
Check both your front-end and back-end DTI ratios, see what category you fall into, and read the personalized recommendation for your situation.
Understanding Your DTI Results
Front-End DTI Ratio
This ratio (also called the housing ratio) shows what percentage of your income goes to housing costs alone. Most lenders prefer this to be below 28%. A front-end DTI of 25% means $1 of every $4 you earn goes to housing.
Back-End DTI Ratio (Total DTI)
This is the key number lenders examine most carefully. It includes ALL monthly debt obligations divided by gross income. Conventional mortgages typically require this below 43%, though some programs allow up to 50% with compensating factors like excellent credit or large down payments.
DTI Category
Your DTI falls into one of four categories: Excellent (below 28%), Good (28-36%), Needs Improvement (36-43%), or High Risk (above 43%). These categories help you quickly understand where you stand and what actions to take.
Recommendation
Based on your DTI category, you'll receive personalized guidance. Excellent DTI means you should qualify easily. Good DTI qualifies for most loans. Needs Improvement suggests reducing debt first. High Risk indicates lenders will likely deny applications.
Formula
Back-End DTI = (Total Monthly Debts / Monthly Gross Income) × 100 Front-End DTI = (Monthly Housing Costs / Monthly Gross Income) × 100
Example
If you earn $6,000/month, have $1,500 in housing costs, and $500 in other debts: Front-End DTI = ($1,500 / $6,000) × 100 = 25%. Back-End DTI = ($2,000 / $6,000) × 100 = 33.3%. This "Good" DTI should qualify for most conventional mortgages.
DTI Guidelines and Tips
Lender DTI Requirements by Loan Type
- Conventional Loans: Typically require back-end DTI below 43%, though some lenders may go to 45% with excellent credit
- FHA Loans: Allow up to 43% back-end DTI, sometimes 50% with compensating factors
- VA Loans: No strict DTI limit, but most lenders prefer below 41%
- USDA Loans: Generally require 41% or below
- Jumbo Loans: Often stricter, preferring 38% or below
How to Improve Your DTI Ratio
- Pay Down Debt: Focus on high-interest credit cards first, or use debt snowball/avalanche methods
- Increase Income: Ask for a raise, start a side business, or add rental income
- Avoid New Debt: Don't take on car loans or finance purchases before applying for a mortgage
- Consolidate Wisely: Consider refinancing to lower monthly payments, but be careful not to extend terms unnecessarily
- Wait to Buy: If your DTI is borderline, spend 6-12 months aggressively paying down debt
What Counts as Debt for DTI?
Included in DTI calculations:
- Mortgage payment (PITI - Principal, Interest, Taxes, Insurance)
- Auto loans and leases
- Credit card minimum payments
- Student loans (even if in deferment)
- Personal loans
- Alimony and child support payments
- Other mortgage or rental property obligations
NOT included in DTI:
- Utilities (electric, gas, water)
- Groceries and food
- Health insurance premiums
- Cell phone bills
- Cable/internet
- Transportation costs (gas, tolls)
The 28/36 Rule
Many financial advisors recommend the 28/36 rule: Keep housing costs below 28% of gross income (front-end DTI) and total debt below 36% (back-end DTI). While not a strict requirement, following this guideline helps ensure you have breathing room in your budget for savings, emergencies, and quality of life.
Related Calculators
Home Affordability Calculator
Calculate the maximum home price you can afford based on income and debts
Mortgage Calculator
Estimate monthly mortgage payments including PITI
Debt Snowball Calculator
Create a debt payoff plan to reduce your DTI ratio
Refinance Calculator
See if refinancing can lower your monthly housing costs
Down Payment Calculator
Calculate how much you need to save for a down payment
Frequently Asked Questions
What is a good DTI ratio for a mortgage?
A good DTI ratio for a mortgage is 36% or below. Most conventional lenders approve borrowers with DTI up to 43%, but lower is better. A DTI below 28% is considered excellent and gives you the best chance of approval with favorable terms. FHA loans may accept up to 50% with strong compensating factors.
Do I include my spouse's income in DTI calculations?
If you're applying for a joint mortgage, you should include both incomes and both sets of debts. If only one person is on the loan, use only that person's income and debts. However, you must include any joint debts (like a car loan in both names) even if only one spouse is on the mortgage.
Why is my DTI high even though I can afford my bills?
DTI is calculated using gross (pre-tax) income, not take-home pay. Your actual monthly budget is based on net income, which is lower. This is why lenders use DTI conservatively - they want to ensure you can handle payments even with tax obligations and retirement contributions.
Can I get a mortgage with a 50% DTI ratio?
It's difficult but possible. FHA loans may approve up to 50% DTI with compensating factors like excellent credit (700+), large down payment (10%+), or significant cash reserves. Conventional loans rarely go above 45%. Most lenders prefer 43% or below.
Should I pay off debt or save for a larger down payment?
If your DTI is above 43%, prioritize paying off debt to qualify for the loan. If your DTI is borderline (38-43%), run the numbers both ways. Often, paying off a car loan or credit card creates more monthly cashflow than saving an extra few thousand for down payment, and it lowers your DTI.
How often should I check my DTI ratio?
Check your DTI quarterly or whenever you experience a significant financial change (new debt, pay raise, loan payoff). Definitely calculate it 3-6 months before applying for a mortgage so you have time to improve it if needed. Monitor it during the home shopping process as you adjust your target price.
Do student loans count toward DTI even if they're deferred?
Yes, student loans typically count toward DTI even in deferment or forbearance. Lenders usually use either the actual monthly payment, 1% of the outstanding balance, or the payment shown on your credit report - whichever is higher. Some lenders may exclude loans in income-based repayment with $0 payments if documented properly.
What if I have income not shown on my tax returns?
Lenders typically only count income that can be documented and verified through tax returns, pay stubs, or bank statements. Cash income, side gigs, or informal arrangements usually don't count unless you've reported them to the IRS. If you have legitimate additional income, start documenting it now for future mortgage applications.
Disclaimer: This calculator provides estimates for informational purposes only. Results should not be considered financial, medical, or professional advice. Always consult with qualified professionals for decisions affecting your finances, health, or wellbeing.