Debt-to-Income (DTI) Ratio Calculator
See what share of your income goes toward debt, and how lenders are likely to view it.
Your Details
How It Works
- Enter your gross (pre-tax) monthly income.
- Enter your recurring monthly debt payments.
- Press Calculate to see your DTI ratio and breakdown.
Formula Used
Good to Know
- • Most mortgage lenders prefer a DTI at or below 43%.
- • DTI uses gross income, not take-home pay.
- • Living expenses like groceries aren't counted as "debt."
Important Notes
- • Different loan types allow different DTI thresholds.
- • This estimate excludes new debt you're considering taking on.
- • Lenders may calculate DTI slightly differently.
What Counts as 'Debt' in This Ratio
DTI only counts recurring debt obligations — housing, auto loans, student loans, minimum credit card payments, and similar fixed commitments. It doesn't include everyday living costs like groceries, utilities, or subscriptions, even though those also compete for your income. That's an important distinction: a low DTI doesn't automatically mean a lot of breathing room if fixed living costs are high.
Why Lenders Care About This Number
DTI is one of the main numbers lenders use to judge how much additional debt someone can comfortably take on. A lower ratio suggests more room in the budget to absorb a new payment; a higher ratio suggests less cushion if income drops or an unexpected expense comes up. Many mortgage programs cap DTI around 43%, though some allow higher ratios with compensating factors like a strong credit score or larger down payment.
Terms to Get Familiar With
- Gross income — income before taxes and deductions; DTI is always calculated on this figure, not take-home pay.
- Front-end DTI — housing costs alone divided by gross income.
- Back-end DTI — all debt payments (housing plus other debts) divided by gross income; this is what most lenders check.
- Qualifying ratio — the maximum DTI a specific loan program allows.
Example, Step by Step: Checking Mortgage Eligibility
A borrower earns $6,500/month gross, pays $1,600 rent, $400 for a car loan, $250 for other loans, and $150 in credit card minimums:
DTI = $2,400 ÷ $6,500 × 100 ≈ 36.9%
At roughly 37%, this borrower sits right at the edge of the commonly used 36% "strong" DTI threshold — likely still qualifying for many conventional loans, but with less room to add new debt. Paying off the $250/month other loan would drop DTI to about 33%, opening up more room under stricter lending guidelines.
DTI Threshold Table by Loan Type
| Loan Type | Typical Max DTI |
|---|---|
| Conventional | 36-45% |
| FHA | up to 50% with compensating factors |
| VA | flexible, often 41%+ allowed |
Mistakes Worth Knowing About When Calculating DTI
- Using net instead of gross income — DTI always uses gross (pre-tax) income.
- Forgetting minimum credit card payments — even small revolving balances count.
- Excluding a co-signed loan — co-signed debt often counts against your DTI too.