Debt-to-Income (DTI) Ratio Calculator
Your debt-to-income ratio (DTI)is the single number lenders lean on most when deciding whether to approve a loan and at what rate. It’s simply how much of your gross monthly income goes to debt payments. This calculator shows both ratios lenders look at and how yours compares to their limits.
How this calculator works
DTI is the share of gross (pre-tax) monthly income spent on debt:
DTI = total monthly debt payments ÷ gross monthly income
Lenders look at two versions:
- Front-end DTI — housing costs only (mortgage/rent plus taxes and insurance) ÷ income. Guideline: ≤ 28%.
- Back-end DTI — all monthly debt (housing + car, student, personal loans, minimum card payments) ÷ income. Guideline: ≤ 36%, with many mortgage programs allowing up to 43%(the “qualified mortgage” limit) and some stretching higher with strong credit.
Why it matters
A lower DTI signals you can comfortably take on a new payment, which means easier approval and better rates. A high DTI is the most common reason mortgage applications are declined. Lowering it — by paying down debt or raising income — directly improves what you can borrow and the terms you’ll get.
Frequently asked questions
- What's a good debt-to-income ratio?
- Lenders generally like to see a back-end DTI of 36% or less, though many mortgages allow up to 43% (and sometimes higher with strong credit and reserves). Under 36% is comfortable; above 43% makes approval harder and rates worse.
- What's the difference between front-end and back-end DTI?
- Front-end counts only housing costs against your income; back-end counts all debt payments including housing. Lenders evaluate both, but the back-end ratio is usually the binding constraint.
- Does DTI use gross or net income?
- Gross (pre-tax) monthly income — that's what lenders use. So your DTI looks lower than it would against take-home pay; budget accordingly, since you live on net, not gross.
- How do I lower my DTI?
- Pay down existing debt (especially high-balance loans and cards), avoid taking on new debt before applying, and increase income. Even paying off one small loan can move the ratio enough to matter.