Debt-to-Income Ratio Calculator

Pay off credit card balances

Credit card minimum payments are often the easiest debt to eliminate. Paying off a card with a $200 minimum payment instantly reduces your back-end DTI and frees cash flow.

Avoid taking on new debt before applying

Every new loan or credit card increases your minimum monthly payments. Wait until after closing on your mortgage to finance a car or make major purchases.

Increase your income

A raise, part-time income, or adding a co-borrower improves your DTI. Lenders need a 2-year history of income to count it, so freelance or side income works if documented.

Make a larger down payment

A larger down payment reduces the loan amount and therefore the monthly mortgage payment, which directly lowers both front-end and back-end DTI.

What is a good debt-to-income ratio?

A DTI of 36% or below is generally considered good by most lenders. Below 28% for housing costs (front-end DTI) is ideal. For mortgage qualification, many lenders accept back-end DTIs up to 43%, while some government-backed loans allow up to 50% with strong compensating factors.

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

Front-end DTI (also called the "housing ratio") includes only your monthly housing costs (mortgage or rent, property taxes, insurance) divided by gross income. Back-end DTI includes all monthly debt payments — housing plus car loans, student loans, credit card minimums, and other obligations.

What DTI do I need to qualify for a mortgage?

Conventional loans typically require a back-end DTI of 43% or less. FHA loans may allow up to 50% with strong credit. The 28/36 rule is a common guideline: front-end DTI ≤28%, back-end DTI ≤36%. A lower DTI and higher credit score improve your loan terms.

Does DTI use gross or net income?

Lenders always use gross income (before taxes and deductions) to calculate DTI. Using your net (take-home) pay would make your DTI appear better, but lenders need a standardized measure, and gross income is consistent regardless of individual tax situations.

How do I lower my debt-to-income ratio?

You can lower your DTI two ways: reduce your debt payments (pay off credit cards, pay down loans, avoid taking on new debt before a mortgage application) or increase your gross income (through raises, a second job, or adding a co-borrower with income). Paying off high-minimum-payment debt like credit cards has the most immediate impact.

Is rent counted in DTI?

When applying for a mortgage, your future mortgage payment replaces your rent in the DTI calculation. If you own a home being sold, the outgoing mortgage is used. Current rent is generally not included in DTI calculations for mortgage purposes.

What debts are not included in DTI?

Utilities, insurance, groceries, subscriptions, and other living expenses are not counted in DTI. Lenders only count installment loans (car, student, personal) and revolving debt minimum payments (credit cards, lines of credit), plus housing costs.

Can I get a mortgage with a 50% DTI?

Some FHA and VA loans allow DTIs above 43%, occasionally up to 50% with strong compensating factors (excellent credit score, large down payment, significant cash reserves). However, a high DTI means a higher monthly payment relative to income, which increases financial stress risk.