Debt-to-Income Ratio Calculator
Understand your financial health and loan eligibility
Your debt-to-income (DTI) ratio is one of the most important factors lenders consider when evaluating your loan applications. This calculator shows you exactly where you stand and what you can do to improve your borrowing power.
Open Source & Transparent
All calculations are open source and verifiable on GitHub. We believe in transparency and welcome contributions to improve our tools.
Your Debt-to-Income Ratio
Good DTIGood
31.7%
Front-End DTI
25.0%
Monthly Debt
$1,900
Available Income
$4,100
Housing Costs
$1,500
Monthly Income
Your total monthly income before taxes and deductions
Monthly Debt Payments
Include mortgage/rent, car loans, credit cards (minimum payment), student loans, and other monthly debt obligations
Quick Summary
Monthly Income
$6,000
Total Monthly Debt
$1,900
Available Income
$4,100
Current DTI Ratio
31.7%
Mortgage Eligibility
Good - Should qualify for most loans
DTI Rating Scale
Understanding Debt-to-Income Ratio
Your debt-to-income (DTI) ratio is a measure of your monthly debt payments compared to your gross monthly income. Lenders use this metric to evaluate your ability to manage monthly payments and repay borrowed money.
A lower DTI ratio indicates you have a good balance between debt and income. Lenders view borrowers with lower DTI ratios as less risky, which typically results in better loan terms and interest rates.
The DTI Formula
DTI = (Total Monthly Debt Payments ÷ Gross Monthly Income) × 100
Example: If you earn $6,000/month gross and have $2,000 in monthly debt payments, your DTI is 33.3% ($2,000 ÷ $6,000 = 0.333 = 33.3%).
Front-End vs. Back-End DTI
Front-End Ratio
Housing costs only: mortgage/rent, property taxes, homeowners insurance, and HOA fees.
Lender Guideline: Keep under 28%
Back-End Ratio
All monthly debt payments: housing, credit cards, car loans, student loans, and other debts.
Lender Guideline: Keep under 43%
What's Included in DTI?
Included in DTI
- • Mortgage or rent payments
- • Auto loan payments
- • Student loan payments
- • Credit card minimum payments
- • Personal loans
- • Child support or alimony
NOT Included in DTI
- • Utilities (electric, gas, water)
- • Groceries and food expenses
- • Health insurance premiums
- • Cable, internet, phone bills
- • Transportation costs
- • Savings and investments
Lender DTI Requirements
Conventional Mortgages
Usually ≤43%, prefer ≤36%
FHA Loans
Up to 43%, sometimes 50% with strong credit
VA Loans
Generally ≤41%
Auto Loans
Typically prefer ≤40%
Important Considerations
- • DTI is just one factor lenders consider - credit score, down payment, and employment history also matter
- • Use gross income (before taxes), not net income for DTI calculations
- • Lenders may calculate DTI differently - some include property taxes and insurance in housing costs
- • High DTI doesn't always mean loan denial, but you may face higher interest rates
- • Self-employed borrowers may need additional documentation to verify income
Frequently Asked Questions
What is a good debt-to-income ratio? ▼
A good DTI is 36% or less. Excellent is 20% or less. Most mortgage lenders prefer 43% or less, though FHA loans may allow up to 50% with strong compensating factors like excellent credit or significant cash reserves.
How can I quickly lower my DTI ratio? ▼
The fastest ways to lower DTI include: paying off the smallest debt entirely, increasing income through overtime or a side job, consolidating debts for lower monthly payments, or adding a co-borrower to increase combined income. Avoid taking on any new debt while improving your DTI.
Does DTI affect my credit score? ▼
No, DTI does not directly affect your credit score because credit bureaus don't have access to your income information. However, high debt levels often correlate with high credit utilization, which does impact your score. Lenders evaluate both DTI and credit score separately.
Should I include rent when applying for a mortgage? ▼
When applying for a mortgage, lenders will calculate your DTI using your future mortgage payment, not your current rent. They'll estimate your housing costs including principal, interest, taxes, and insurance (PITI) to determine if you qualify.
What income sources count toward DTI? ▼
Gross income from all verifiable sources counts: salary, hourly wages, bonuses (if consistent), commissions, self-employment income, rental income, alimony/child support received, Social Security, pension, and investment income. Lenders typically require documentation like tax returns or pay stubs.
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