Debt-to-Income Ratio Calculator

How do you use this debt-to-income ratio calculator?

Enter your gross yearly income, the full monthly house payment you are considering, and the minimum payments on your other debts. You get two percentages, a plain-English reading of the result, and how many dollars a month you have before your total debts reach 36% of income.

Tips for each input:

• Gross annual income: pay before taxes for everyone on the loan. Include steady overtime or bonuses only if you have a track record a lender can verify.
• Monthly housing payment: use the full payment (principal, interest, tax, insurance, mortgage insurance and HOA dues). The mortgage payment calculator can build this number for you.
• Other monthly debts: use the minimum payments that show on your credit report. You can check your reports free each week, as the Federal Trade Commission explains.

How is DTI calculated?

The math is simple division. Divide your yearly income by 12 to get monthly income, then divide your payments by it and multiply by 100.

• Front-end DTI = housing payment ÷ gross monthly income × 100
• Back-end DTI = (housing payment + other debts) ÷ gross monthly income × 100
• Room before 36% = gross monthly income × 36% − housing payment − other debts

The reading is based on the back-end ratio: 36% or less is shown as comfortable, above 36% up to 43% as within common limits, above 43% up to 50% as stretched, and above 50% as high. These bands are guides, not lender rules.

The calculator does not judge which debts a lender will count or what income they will accept. Each program has detailed rules for things like deferred student loans, variable income and co-signed debts.

What does a worked example look like?

A buyer earning $85,000 a year who is looking at a $2,100 house payment and pays $550 a month on other debts has a front-end DTI of about 29.6% and a back-end DTI of about 37.4%. That is just over 36%, so they are about $100 a month above the comfortable line.

What does your result mean for a mortgage?

Your DTI is one of the main numbers a lender uses to size your loan. Each program sets its own limit, and automated systems can approve higher ratios when the rest of your file is strong. Being under a limit does not guarantee approval, and being over one does not always rule it out.

Sources: Fannie Mae’s Selling Guide on DTI and HUD’s FHA Handbook 4000.1. The CFPB notes that different loan products and lenders have different DTI limits, and lenders may add stricter rules of their own. Under the federal ability-to-repay rule, a lender must look at either your DTI or your residual income, as the CFPB’s Qualified Mortgage page explains.

What are the most common mistakes?

Most DTI surprises come from counting the wrong numbers:

• Using take-home pay. DTI uses gross income, so net pay makes your ratio look worse than a lender would see it.
• Entering principal and interest only. The housing payment should include taxes, insurance, mortgage insurance and HOA dues.
• Counting balances instead of payments. DTI uses monthly minimum payments.
• Forgetting small accounts. Store cards and buy-now-pay-later plans can count.
• Opening new credit before closing. A new car loan can push your DTI over the limit after you are approved.

Where should you go next?

To turn a target DTI into a price, use the home affordability calculator. To see the income a specific home needs, try the income needed calculator.

For more on approval, read how much house you can afford, buying a house with a 620 credit score and prequalification vs. preapproval.