Debt-to-Income Calculator
Calculate your debt-to-income (DTI) ratio. Lenders use this to determine if you can afford a loan. Most prefer DTI below 36%.
A $1,500 housing payment plus $500 of other debt against $6,000 of gross monthly income is a 33.3% debt-to-income ratio — inside the 36% guideline most lenders apply, with housing alone at 25%.
Calculator
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How This Calculator Works
Debt-to-income ratio is calculated as:
DTI = Total Monthly Debt / Gross Monthly Income × 100
What Your DTI Means
Lenders typically prefer DTI below 36%, with no more than 28% going toward housing. A DTI above 43% may disqualify you from many loans.
Worked example
Using the defaults — $1,500 of monthly housing, $500 of other debt, and $6,000 of gross monthly income:
Total the debt. $1,500 + $500 = $2,000 a month in required payments. Rent or mortgage, car loans, student loans, minimum card payments and court-ordered support all count. Utilities and groceries do not.
Divide by gross income. $2,000 ÷ $6,000 = 33.3%. Gross income is used, before tax and deductions, because that is the figure lenders underwrite against.
Split the two ratios. Housing alone is $1,500 ÷ $6,000 = 25.0% against the 28% front-end guideline. Total debt is 33.3% against the 36% back-end guideline. Both are inside the limits, but housing is the tighter of the two.
Find your headroom. At $6,000 of income, a 36% DTI ceiling allows $2,160 of total debt. You have $160 a month of room — which supports roughly $160 more in payments, or about $25,000 of additional 30-year mortgage at 6%.
Enter 1500, 500 and 6000 above to reproduce the 33.3% ratio. The 28/36 guideline is a conventional-lending convention; FHA and some automated underwriting systems allow higher ratios with compensating factors.
Where your DTI lands, and what it permits
The same $6,000 income with different debt loads, shown against the conventional guidelines.
| Housing | Other debt | Total debt | DTI | Assessment | Max 30-yr mortgage at 6% |
|---|---|---|---|---|---|
| $1,000 | $200 | $1,200 | 20.0% | Excellent | ~$335,000 |
| $1,200 | $400 | $1,600 | 26.7% | Very good | ~$267,000 |
| $1,500 | $500 | $2,000 | 33.3% | Good (default) | ~$200,000 |
| $1,700 | $700 | $2,400 | 40.0% | Caution | ~$133,000 |
| $2,000 | $800 | $2,800 | 46.7% | High risk | Not conventionally approvable |
The maximum-mortgage column assumes a 36% DTI ceiling, an 8% down payment and a 6% rate on a 30-year loan, with the remaining debt service deducted from capacity. It is an illustration of how DTI constrains borrowing, not a lending offer.
Common mistakes with this calculation
- Using take-home pay instead of gross. DTI is calculated on gross income, before tax and deductions. Computing it on your net pay produces a higher ratio than any lender will, and it leads people to under-estimate what they can borrow.
- Leaving out the debts you forget about. Student loans in deferment, a car lease, a co-signed loan for a family member, and the minimum payment on a store card all count. Pull your credit report before you apply so nothing appears that you did not declare.
- Treating 43% as a target rather than a ceiling. 43% is the qualified-mortgage threshold, above which a loan loses certain legal protections and many lenders will not fund it. It is a boundary, not a recommendation. The payment at 43% of gross is usually uncomfortable against real living costs.
- Forgetting that only minimum payments count. Lenders count the minimum required payment on revolving debt, not what you actually pay. Paying $500 a month on a card whose minimum is $35 still counts as $35 for DTI — but the lender may treat a paid-off card differently, so clearing balances before applying helps.
When this calculator does not apply
- It takes three inputs. Real underwriting also weighs credit score, reserves, employment history and the loan-to-value ratio.
- It uses gross income with no allowance for a second borrower, variable income, bonus, commission or self-employment, all of which are assessed with their own averaging rules.
- It does not model the effect of paying off a specific debt, which frees only that minimum payment.
- Guidelines differ by loan programme: FHA, VA and USDA each treat housing and total ratios differently.
- It ignores compensating factors such as significant cash reserves, which can allow approval above the stated ceilings.
Frequently Asked Questions
What is a good DTI ratio?
Below 36% is preferred by most lenders. Below 28% is excellent. Above 43% may prevent you from getting a mortgage.
What counts as debt for DTI?
Housing (rent or mortgage), car loans, student loans, minimum credit card payments, child support, and other recurring debt. Utilities and groceries do not count.
Sources & Methodology
This calculator uses standard financial formulas. See our methodology page for the full formula derivation.
- What Is a Debt-to-Income Ratio? Consumer Financial Protection Bureau
- Ability-to-Repay and Qualified Mortgage Rule Consumer Financial Protection Bureau
- Loan Options and Mortgage Costs Consumer Financial Protection Bureau
- Consumer Credit Outstanding Federal Reserve
- Mortgage Market Data Federal Reserve
Last reviewed .
Key takeaways
- $2,000 of monthly debt against $6,000 of gross income is a 33.3% DTI, inside the 36% guideline.
- Housing alone is 25% here, against the 28% front-end convention.
- Lenders use gross income and minimum payments — not take-home pay and actual payments.
- 43% is the qualified-mortgage ceiling, not a sensible target.
- At a 36% ceiling, this borrower has about $160 a month of borrowing headroom.