Debt-to-Income Ratio Calculator

Understand DTI Ratios

Our DTI ratio calculator can help you assess your ability to make the monthly payments on a mortgage.

How It Works

Step 1:
Enter your gross monthly income, which is how much you earn each month before taxes and other deductions are taken out.

Step 2:
Enter information on your housing expenses and debt, including your mortgage or rent, credit card payments, and other loan payments.

Step 3:
The debt-to-income ratio calculation will show you how much of your income goes toward paying off debt every month.

Get Started

Your results will show here once you complete the questions above.

What Is a Debt-to-Income Ratio?

Your debt-to-income ratio is an important figure that projects how easily you’ll be able to make your mortgage payments. Measuring your ability to manage debt helps lenders determine if they should extend a loan.

A low DTI ratio means you make significantly more money than what you owe each month, so you’re more likely to comfortably cover your mortgage payments. A high DTI ratio means you have a lot of debt compared with how much you earn, so you might run into trouble with repayment.

What Factors Make Up a DTI Ratio?

There are two types of DTI ratios: the front-end DTI ratio and the back-end DTI ratio. Lenders may examine both front-end and back-end ratios when assessing your risk as a borrower.

Front-end ratio

Rather than examining all your monthly debts, this figure focuses on how much of your income is allocated toward housing costs — including your mortgage payment, property taxes, homeowners insurance, and mortgage insurance. Certain home loans don’t have a maximum front-end DTI ratio requirement.

Back-end ratio

This figure looks at all monthly debt payments and financial obligations, which include housing costs, auto loans, credit cards, student loans, personal loans, alimony, and child support. Your back-end DTI ratio captures your monthly cash flow more clearly than your front-end DTI ratio, which only considers how much you spend on housing expenses relative to your income.

How To Calculate Debt-to-Income Ratio

So, how are debt-to-income ratios calculated? Add up your monthly debt payments, and then divide the total by your gross monthly income to get your DTI ratio.

As you figure out your total monthly debt payments and gross monthly income, keep these tips in mind:

  • When determining your back-end DTI ratio, account for the minimum monthly payments on all your recurring debts and financial obligations.
  • Your gross monthly income isn’t your take-home pay. It’s your earnings before taxes and other deductions — like your health insurance premium or 401(k) contribution — are taken out.

DTI Ratio Limits for Mortgages

Requirements vary depending on the type of mortgage you’re applying for. We’ve compiled the front-end and back-end DTI ratio limits for conventional mortgages and loans backed by the Federal Housing Administration, Department of Veterans Affairs, and Department of Agriculture:

Maximum Debt-to-Income Ratio Requirements

Mortgage TypeFront-End DTI Ratio LimitBack-End DTI Ratio Limit
Conventional loan N/A36% for manually underwritten loans, or 45% if the borrower meets credit score and reserve requirements; 50% for loans underwritten through an automated system
FHA loan 31%, or 40% if the borrower has a credit score of at least 580 and meets certain conditions43%, or 50% if the borrower has a credit score of at least 580 and meets certain conditions
VA loan N/A41%; borrowers with a back-end ratio exceeding 41% may still get approved depending on other financial factors
USDA loan 29%, or 32% if the borrower has a credit score of at least 680 and meets certain conditions41%, or 44% if the borrower has a credit score of at least 680 and meets certain conditions

What Is a Good Debt-to-Income Ratio?

Generally, 43% is the highest DTI ratio that a borrower can have and still get approved for a qualified mortgage, which has certain stable features. However, many lenders prefer to see DTI ratios below 36%.

How To Lower Your Debt-to-Income Ratio

If you calculate your debt-to-income ratio and find that it’s too high, here are some tips to help lower that number before applying for a mortgage:

  • Work on reducing your total debt by paying down your credit cards and other loan balances.
  • Be careful with your existing credit, making sure to pay your bills on time and in full.
  • Avoid taking on additional debt.
  • Try to increase your income by adopting a side hustle or asking for a raise at work.

What’s Next?

If your results from our debt-to-income ratio calculator help you decide that you’re ready to take on monthly mortgage payments, then it’s time for the next step: getting preapproved for a mortgage. You can also get matched with a lender to find out what loan terms you could get.

Debt-to-Income Calculator FAQ

Here are the answers to some frequently asked questions about DTI ratios.

Why do lenders look at DTI ratios?

Lenders pay attention to your debt-to-income ratio because it indicates your ability to repay a loan. Borrowers with higher DTI ratios are more likely to experience difficulty making their monthly mortgage payments.

How do DTI ratios affect credit scores?

Your DTI ratio isn’t used to calculate your credit score. However, both your DTI ratio and your credit score are affected by the amount and type of credit you’re using, as well as any new accounts that you’ve opened.

Are debt-to-income ratios pretax?

Yes. DTI ratios are calculated using your gross monthly income, which is the amount you make every month before taxes and other deductions are taken out.

Are utilities included in debt-to-income ratios?

Utilities — such as electricity, gas, and water bills — aren’t included in the debt-to-income ratio calculation.

What is the 28/36 rule?

The 28/36 rule is one way to make sure that you aren’t taking on a mortgage you can’t afford. According to the rule, you shouldn’t spend more than 28% of your pretax income on your housing expenses, and your total monthly debt payments shouldn’t exceed 36% of your earnings. Essentially, it’s best if your front-end DTI ratio is no more than 28%, and your back-end DTI ratio doesn’t go over 36%.

What are some warning signs of debt problems?

Debt can get out of hand, especially if it accumulates over time and collects interest. Here are several warning signs of debt problems:
– You’re spending more than you’re earning.
– A credit application or request for higher limits is denied.
– You don’t have an emergency savings fund.
– You can only afford to make minimum payments on your credit cards.
– Your DTI ratio is over 43%.

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