Debt
Debt-to-Income Ratio Calculator
Your budget says whether a payment fits your life; your debt-to-income ratio says whether a lender will let you try. DTI divides all recurring monthly debt payments by gross monthly income, and it gates nearly every borrowing decision — mortgages, cars, personal loans — before a rate is even quoted.
Results
Your back-end DTI: 35.0%, Housing-only ratio: 25.0%, Monthly debt payments: $2,100.00, Headroom under 36%: $60.00
- Your back-end DTI
- 35.0%
- All monthly debt payments ÷ gross monthly income
- Housing-only ratio
- 25.0%
- Rent or mortgage PITI ÷ gross income (28% guideline)
- Monthly debt payments
- $2,100.00
- Of $6,000.00 gross monthly income
- Headroom under 36%
- $60.00
- Additional monthly payment the guideline could still absorb
Where your ratio stands
| Back-end DTI | What it means for borrowing |
|---|---|
| Below 36% ← you are here | Within the classic guideline — conventional mortgages and most credit sit comfortably here |
| 36–43% | Approvable range at many lenders, especially with a strong credit score or a sizable down payment |
| 43–50% | Tight — FHA and some conventional programs allow it, but compensating factors must carry the file |
| Above 50% | Most mainstream borrowing is out of reach until payments come down or income rises |
- DTI uses gross income (before taxes) — which is why it feels harsher than your budget does; lenders reason from the top line, not take-home.
- Living costs — groceries, utilities, insurance, childcare — never count toward DTI, but they are exactly what a real budget protects: this ratio and a budget measure different things.
- Credit card minimums count at their minimum, not your balance; that is why paying a card to $0 removes its whole payment from the ratio.
- The 36% line is the conventional guideline (the classic 28/36 rule: 28% housing-only, 36% all-in); approvals above it exist — commonly to the mid-40s, FHA to 50 — but pricing and scrutiny climb with the ratio.
How to use this calculator
- Enter your gross monthly income — before taxes and deductions, including regular side income.
- Enter your monthly housing payment: rent now, or the full mortgage payment (principal, interest, taxes, insurance) when shopping for one.
- Add the monthly payments on every other debt: auto loans, student loans, credit card minimums, personal loans, BNPL plans.
- Read your back-end DTI against the bands, then check the headroom number — it is the payment capacity a lender would say you still have.
How the calculation works
back-end DTI = (housing + all monthly debt payments) ÷ gross monthly income front-end ratio = housing ÷ gross monthly income headroom = 36% × gross income − monthly debt payments
Ratios of payments to income, expressed as percentages. The classic underwriting guideline is 28/36: housing alone under 28%, all debt payments under 36% of gross income. Gross is used throughout — lenders underwrite from the top line.
Worked example
Input
Gross monthly income: $6,000. Housing: $1,500. Auto loan: $300. Student loans: $250. Credit card minimums: $50. No other debts.
Result
Monthly payments: $2,100. Back-end DTI: 2,100 ÷ 6,000 = 35.0% — inside the 36% guideline with $60 of monthly headroom. Housing-only ratio: 1,500 ÷ 6,000 = 25.0%, comfortably under the 28% front-end line.
Assumptions and important notes
- Gross (pre-tax) income is the basis — dividing by the smaller take-home figure would read roughly 25–40% higher and no longer match what lenders compute.
- Only recurring debt payments count: groceries, utilities, insurance, childcare, and subscriptions are invisible to DTI (they are not invisible to your budget).
- Credit cards count at their monthly minimum, not at the balance or at what you actually pay.
- Bands summarize common U.S. underwriting practice (28/36 guideline, approvals commonly to the mid-40s, FHA to 50); every lender sets its own cutoffs and overlays.
Frequently asked questions
Is DTI based on gross or net income?
Gross — before taxes, insurance premiums, and retirement contributions come out. That is why a 36% DTI can feel tighter than "36% of my money" in real life: the lender's denominator is bigger than the paycheck you actually see.
Does rent count?
Yes — housing is the anchor of the ratio. Renters include rent; buyers include the full expected mortgage payment (principal, interest, property taxes, insurance, and HOA if any). For mortgage applications, the proposed payment replaces your current rent.
How do I lower my DTI quickly?
Two levers, and one is much faster: eliminate small monthly payments (a $150 remaining auto loan removed by a payoff drops the ratio by exactly that payment), or raise gross income (documented, so a raise counts before a side hustle does). Paying down a credit card balance helps only if it lowers the minimum.
What DTI do lenders actually want?
The classic guideline is 36% all-in with housing under 28%. Conventional approvals routinely extend into the low-to-mid 40s with strong credit or a large down payment; FHA allows up to 50% when compensating factors justify it. Above 50%, mainstream options mostly close.
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