Calculate your debt-to-income ratio to assess your financial health and lending eligibility. Get personalized recommendations for mortgage approval and debt management.
Your debt-to-income ratio is one of the most important factors lenders consider when evaluating loan applications. It shows them how much of your income already goes to debt payments, which helps predict whether you can handle additional debt responsibly.
Most mortgage lenders prefer to see a DTI of 28% or lower for housing payments (front-end ratio) and 36% or lower for total debt (back-end ratio). Some programs allow higher ratios, but you'll typically pay higher interest rates.
28% front-end, 36% back-end. Best rates and terms for qualified borrowers.
31% front-end, 43% back-end. More flexible for first-time buyers.
No strict DTI limit. Focuses on residual income after all expenses.
Usually 28% front-end, 36% back-end. Stricter requirements for large loans.
Most lenders use gross income (before taxes) for DTI calculations. This is your total income before any deductions. However, some alternative lenders or specific loan programs might consider net income, especially for self-employed borrowers or those with complex income situations.
Include all recurring monthly debt payments: mortgage/rent, credit card minimums, auto loans, student loans, personal loans, child support, and alimony. Don't include utilities, groceries, insurance (unless part of mortgage payment), or other living expenses.
Yes, but with limitations. Some lenders accept DTI ratios up to 50% or higher, especially for borrowers with excellent credit, large down payments, or significant cash reserves. However, you'll typically face higher interest rates and more stringent approval requirements.
The fastest ways: increase your income (side job, raise, bonus), pay down existing debt balances, or consider debt consolidation to lower monthly payments. For mortgage applications, sometimes paying off small debts entirely can have a bigger impact than partially paying down larger ones.
DTI = (Total Monthly Debt Payments ÷ Monthly Gross Income) × 100
For example: If you have $2,000 in monthly debt payments and earn $6,000 monthly, your DTI is ($2,000 ÷ $6,000) × 100 = 33.3%.
Front-End = (Housing Payments ÷ Monthly Gross Income) × 100
Housing payments include mortgage principal, interest, taxes, insurance, and HOA fees. This ratio should typically be 28% or lower for conventional loans.