Debt-to-Income Calculator
Calculate your DTI ratio to see how lenders view your financial health and whether you'll qualify for mortgages and loans.
Gross Monthly Income
Enter your total monthly income before taxes and deductions
Gross annual income: $72,000
Monthly Debt Payments
Include all recurring monthly debt payments
Front-End DTI
$1,500 / $6,000
Back-End DTI
$2,300 / $6,000
Remaining Income
$3,700
61.7% of income
Housing Payments
$1,500
25.0% of income
Other Debt Payments
$800
13.3% of income
Income Allocation
Recommendations
You're approaching the limit for many lenders. Consider reducing debt.
Tips to Improve Your DTI:
- • Focus on paying down credit card balances
- • Avoid opening new credit accounts
- • Consider making extra payments on loans
- • Review subscriptions and recurring expenses
What is Debt-to-Income Ratio?
Your debt-to-income (DTI) ratio is a personal finance measure that compares your monthly debt payments to your gross monthly income. Lenders use this number to evaluate your ability to manage monthly payments and repay borrowed money.
Two Types of DTI
Front-End DTI
Also called the "housing ratio," this measures only your housing costs (mortgage/rent, property taxes, insurance, HOA fees) against income.
Housing Payments ÷ Gross Income × 100Ideal: 28% or less
Back-End DTI
This measures ALL your monthly debt payments—housing plus credit cards, car loans, student loans, child support, etc.
All Debt Payments ÷ Gross Income × 100Ideal: 36% or less
DTI Requirements by Loan Type
| Loan Type | Max Front-End | Max Back-End | Notes |
|---|---|---|---|
| Conventional Mortgage | 28% | 36-43% | Higher DTI may require compensating factors |
| FHA Loan | 31% | 43-50% | More flexible, up to 57% with strong credit |
| VA Loan | N/A | 41% | No front-end requirement, uses residual income test |
| USDA Loan | 29% | 41% | For rural areas, income limits apply |
| Qualified Mortgage (QM) | N/A | 43% | Legal safe harbor for lenders |
| Personal Loan | N/A | 35-40% | Varies by lender |
What Your DTI Means
Excellent
You're in great shape. You have significant room for new debt if needed and should qualify for the best rates and terms.
Good
You're managing debt well. Most lenders will approve you for new credit without concerns.
Fair
You're approaching lender limits. You may still qualify but with less favorable terms. Consider paying down debt.
Concerning
You may have difficulty getting approved. Focus on paying down debt before applying for new credit.
Critical
Your debt load is too high. Most lenders will deny applications. Prioritize aggressive debt reduction.
How to Lower Your DTI
💰 Reduce Debt (Numerator)
- • Pay off credit cards completely
- • Make extra payments on car loans
- • Refinance to lower monthly payments
- • Avoid taking on new debt
- • Consider debt consolidation
- • Pay off small debts entirely
📈 Increase Income (Denominator)
- • Ask for a raise at work
- • Start a side business
- • Take on freelance work
- • Include all income sources (bonus, commission)
- • Add a co-borrower with income
- • Document rental income from property
Pro tip: Even small changes can make a difference. Paying off a $200/month car payment on a $6,000/month income drops your DTI by 3.3%. That could be the difference between approval and denial.
What Counts as Debt?
✓ Included in DTI
- • Mortgage or rent payment
- • Property taxes and insurance
- • HOA dues
- • Credit card minimum payments
- • Auto loans
- • Student loans
- • Personal loans
- • Child support / alimony
- • Other court-ordered payments
✗ NOT Included in DTI
- • Utilities (electricity, gas, water)
- • Cell phone bills
- • Internet / cable
- • Groceries
- • Health insurance premiums
- • Car insurance
- • Subscriptions (Netflix, gym)
- • Entertainment expenses
- • Savings contributions
Frequently Asked Questions
Why do lenders care about DTI?
DTI helps lenders assess risk. A high DTI means more of your income goes to debt, leaving less cushion for unexpected expenses or payment increases. Studies show that borrowers with high DTIs are more likely to default on loans.
Should I use gross or net income?
Always use gross income (before taxes and deductions). This is the standard that all lenders use. Using net income would make your DTI appear worse than how lenders will calculate it.
Does DTI affect my credit score?
No, DTI is not a factor in credit score calculations. Credit scores consider your credit utilization (how much available credit you're using), not your income or overall debt-to-income ratio. However, both matter for loan approval.
Can I qualify with a high DTI?
Sometimes, yes. Lenders may approve higher DTIs if you have compensating factors like excellent credit (740+), significant savings or reserves, large down payment, stable long-term employment, or the loan is for a lower amount than you qualify for.
How quickly can I lower my DTI?
Paying off a debt lowers your DTI immediately for future applications. The fastest ways are: pay off small debts entirely, pay down credit card balances to $0, or refinance loans for lower monthly payments. Income increases also help but may need to be documented for 2 years for mortgage qualification.