Debt-to-Income Ratio Calculator

Debt-to-income (DTI) ratio compares your monthly debt payments to your gross monthly income. The formula is: DTI = (Total Monthly Debts ÷ Gross Monthly Income) × 100. For example, if you earn $6,000/month gross and have $1,800 in monthly debt payments, your DTI is 30%. Lenders use this ratio to assess whether you can afford additional debt like a mortgage.

Front-end DTI (housing ratio) includes only housing costs—mortgage principal, interest, taxes, and insurance (PITI). Back-end DTI (total debt ratio) includes all monthly debts: housing plus car loans, student loans, credit cards, and other obligations. For a conventional mortgage, lenders typically want front-end ≤28% and back-end ≤36%, though some programs allow higher ratios.

Requirements vary by loan type. Conventional loans typically require back-end DTI of 36-43%. FHA loans allow up to 43-50% with compensating factors like strong credit or cash reserves. VA loans allow up to 41% with no official front-end limit. Jumbo loans often require stricter DTI of 43% or less. Your credit score, down payment, and reserves also affect qualification.

Four strategies work best: (1) Pay off or pay down existing debts, especially credit cards and car loans. (2) Avoid opening new credit accounts or taking on new debt. (3) Increase your income through raises, bonuses, or documented side income. (4) Consider a less expensive home to reduce your proposed mortgage payment. Even small changes can move you into a better qualification tier.

Lenders count gross (pre-tax) income from stable, documented sources: salary, wages, bonuses (if consistent), commissions, self-employment income (2-year history), rental income, alimony/child support (if continuing 3+ years), Social Security, and pension income. Variable income like overtime or bonuses typically requires a 2-year history. Investment income usually requires documentation showing it will continue.