Debt-to-income (DTI) ratio calculator

How the formula works

Your debt-to-income ratio is the single number a lender leans on hardest. It asks a blunt question: of the money you make each month, how much is already promised to somebody else? It comes in two flavours. The front-end ratio counts housing alone — rent, or a mortgage payment with taxes and insurance folded in (the PITI) — against gross monthly income:

The back-end ratio is the one that usually decides the loan. It counts every required monthly debt payment — housing plus car loans, student loans, credit-card minimums and anything else on your credit report — over the same gross income:

Lenders read the result against a few well-worn thresholds. The classic 28/36 rule says housing should stay under 28% of gross and total debt under 36% — the comfortable zone. Above that, many programs still approve up to 43%, a long-standing lender guideline that was once a hard limit in the federal Qualified Mortgage rule (the CFPB replaced that limit with a price-based test in 2021, and some automated underwriting goes to 50%); past 43% you usually need compensating factors or a specialised program, and the odds of a decline climb. Why do lenders care? DTI is a direct read on repayment capacity — the lower it is, the more of a shock (a rate reset, a repair bill, a lean month) your budget can absorb before a payment is missed. One honest caveat runs through all of it: DTI is measured on gross income, the figure before tax and deductions, while your actual budget lives on the smaller net pay that lands in your account. A ratio that looks fine on gross can feel tight in real life.

What each input means

Gross monthly income

Pay before tax and deductions, per month — the figure lenders qualify you on. If you are paid annually, divide by twelve; if hourly, multiply your usual hours by your wage. Steady bonus or side income counts only if you can document a history of it.

Housing payment (rent or PITI)

Your monthly rent, or a mortgage's full PITI — principal, interest, property taxes and insurance, plus any HOA dues. This is the only figure in the front-end ratio, and it also sits inside the back-end ratio.

Car / student / personal loans

The monthly minimums that appear on your credit report: auto loans, student loans, personal or installment loans. Use the required payment even if you usually pay more.

Credit-card minimums

The sum of the minimum payments on your cards, not the full balance. Lenders count the minimum because that is the amount you are contractually obliged to pay each month.

Other monthly debt

Anything else a lender would tally: child support, alimony, a co-signed loan you are on the hook for. Living costs that are not debts — utilities, insurance premiums, groceries, phone bills — do not belong here.

A worked example

The worksheet's defaults: a $6,000 gross monthly income, a $1,600 housing payment, $450 of loan payments, $150 in card minimums and no other debt.

• Total monthly debt: $1,600 + $450 + $150 + $0 = $2,200.
• Back-end DTI: $2,200 / $6,000 = 36.7% — the number that decides the loan.
• Front-end DTI: only the $1,600 housing payment counts, so $1,600 / $6,000 = 26.7%.
• Verdict: a back-end ratio of 36.7% is acceptable — near the limit — it clears the 43% ceiling but sits above the 36% comfort line.
• Room before 43%: 43% × $6,000 − $2,200 = $380 of additional monthly payment you could take on and still qualify under the ceiling.

Assumptions and limits

• DTI is measured on gross income and on the minimum required payments — not the amounts you actually pay or the net pay you actually live on.
• When you apply for a loan, the lender counts the new loan's payment inside the back-end ratio. Check what your DTI becomes with the new mortgage or car payment added, not just your DTI today.
• Thresholds are guidelines, not law. Many loan programs allow a higher DTI with compensating factors — a strong credit score, large cash reserves, a big down payment — and automated underwriting may approve above 43% or decline below it.
• Utilities, insurance premiums, groceries, phone and streaming bills are not debts and are not counted; only obligations that appear as debt on your credit report belong in the ratio.
• This is arithmetic on the numbers you enter, not advice. It estimates how a lender would read your ratio; it cannot see your full file.

Questions people ask

What is a good debt-to-income ratio?

Lower is better, and the widely cited comfort line is a back-end ratio at or under 36% — total monthly debt no more than 36% of gross monthly income, with housing alone under 28%. Between 36% and 43% you are still approvable for most loans but carrying more than lenders like to see. The default scenario here lands at 36.7%, which is acceptable — near the limit: fine for approval, but worth trimming if you can.

What is the difference between front-end and back-end DTI?

The front-end (or housing) ratio counts only your housing payment against gross income; the back-end ratio counts all your monthly debt — housing plus loans, card minimums and everything else on your credit report. The back-end number is almost always the one that decides the loan, because it captures your whole obligation, not just the roof. The 28/36 rule pairs them: 28% front-end, 36% back-end.

What is the 43% rule?

43% is a common back-end DTI guideline. It used to be a hard limit in the federal Qualified Mortgage (QM) rule, but the CFPB's General QM rule replaced it in 2021: lenders must still consider your DTI, and a loan now qualifies mainly by how its rate compares with the market average (12 CFR 1026.43(e)(2)). Many programs still use 43% as their cut-off, and some automated underwriting approves up to 50% with compensating factors, so 43% remains the number to beat if you want the widest, cheapest set of loan options.

How do I lower my DTI?

Two levers, since DTI is a fraction: shrink the debt on top or grow the income underneath. Paying off a loan or a card removes its whole minimum from the ratio — clearing the $150 of card minimums in the default scenario alone drops the back-end DTI from 36.7% to 34.2%. Raising income helps too: a $1,000 bump in gross monthly income takes the same ratio down to 31.4%. And crucially, do not open new credit before applying — a new car loan or card adds a payment and pushes the ratio the wrong way at the worst moment.

Does my DTI affect my credit score?

Not directly — DTI is not a factor in your credit score at all, because the scoring models cannot see your income. What they do see is your credit utilization: how much of your available credit-card limits you are using, which is a large part of a score. The two are easy to confuse. DTI matters to a lender approving a loan; utilization matters to the score itself. Both improve when you pay down balances, which is why paying off cards helps on every front at once.