Debt-to-Income Ratio (DTI) Calculator
Calculate your debt-to-income ratio (DTI) to see how lenders evaluate your borrowing capacity. Enter your monthly debt payments and gross monthly income to find your front-end and back-end DTI ratios.
How to use this tool
- Enter monthly housing payment (piti), monthly car loan / lease, monthly student loan payment, monthly credit card minimums, other monthly debt payments and gross monthly income in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your back-end dti (all debts) and the full breakdown beneath it.
⚠ This tool provides general estimates for education only and is not financial, tax or legal advice. Figures may not reflect your situation — verify with a qualified professional.
Formula
Back-End DTI (all debts):
DTI = (Total Monthly Debt Payments / Gross Monthly Income) × 100
Front-End DTI (housing only):
Front-End DTI = (Monthly Housing Payment / Gross Monthly Income) × 100
How it works
The debt-to-income ratio compares your total recurring monthly debt obligations to your gross (pre-tax) monthly income. Lenders use the back-end DTI, which includes all debt payments, as the primary qualification metric. Most conventional lenders prefer a back-end DTI at or below 43%, and a front-end (housing-only) DTI at or below 28%.
Worked example
Homebuyer with $6,000 Monthly Income
- Monthly obligations: housing $1,200 + car $300 + student loan $200 + credit card $100 = $1,800 total.
- Back-end DTI = ($1,800 / $6,000) × 100 = 30%.
- Front-end DTI = ($1,200 / $6,000) × 100 = 20%.
- Maximum debt at 43% DTI = $6,000 × 0.43 = $2,580.
Back-end DTI is 30.00%, well within the conventional lending guideline of 43%.
Common mistakes to avoid
- Using net (after-tax) income instead of gross monthly income in the denominator — lenders always use pre-tax income, so net income produces a misleadingly high DTI.
- Omitting minimum payments on debts not listed on a credit report (e.g., informal personal loans, alimony) when calculating back-end DTI, which can cause loan approval surprises.
- Confusing front-end and back-end DTI: including all debts in the front-end ratio or housing costs only in the back-end ratio leads to incorrect thresholds.
Key terms
- What is the DTI ratio?
- Debt-to-income ratio measures the percentage of your gross monthly income that goes toward recurring debt payments. Lenders use it to assess repayment risk.
- What is a good DTI ratio?
- Most lenders prefer a back-end DTI below 43%. A DTI under 36% is considered strong, and under 20% is excellent.
- What is the difference between front-end and back-end DTI?
- Front-end DTI includes only housing costs (principal, interest, taxes, insurance). Back-end DTI includes all monthly debt obligations.
- Does DTI use gross or net income?
- DTI calculations use gross (pre-tax) monthly income, not take-home pay.
Frequently asked questions
- What DTI ratio do lenders consider acceptable for a mortgage?
- Most conventional lenders prefer a back-end DTI below 43%. FHA loans allow up to 50% in some cases. A front-end DTI below 28% is generally considered healthy.
- Does my DTI include student loans in deferment?
- Yes, for mortgage underwriting most lenders count a percentage of the outstanding student loan balance (often 1%) or the fully amortizing payment even if the loan is in deferment.
- How can I lower my DTI quickly?
- Pay down revolving debt balances to reduce minimum payments, or increase gross income. Avoid taking on new loans before applying for credit.