Calculate your DTI
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Key takeaways
- DTI = monthly debt payments ÷ gross monthly income. Lenders check it on every mortgage, auto, and personal loan.
- Two versions: front-end (housing only, guideline ≤28%) and back-end (all debts, guideline ≤36%, mortgage ceiling often ~43%).
- DTI ignores balances — it's all about payments, so lowering any monthly payment improves it immediately.
Table of contents
How lenders read your number
DTI answers one question: how much of your income is already spoken for? Under roughly 36% back-end, you look flexible; between 36–43% you're approaching the ceiling many mortgage programs use; beyond that, approvals thin out and rates climb. The CFPB's DTI explainer covers how specific loan types treat it. Planning a home purchase? Pair this with our home loan calculators and FHA calculator — FHA programs often allow higher DTIs than conventional loans.
Fastest ways to lower DTI
Because DTI counts payments, not balances, the quickest wins are payment-shaped: pay off a small debt entirely (its whole payment disappears — the snowball method is DTI-optimized by accident), refinance a high payment, or grow the income side. Avoid the trap of stretching loan terms just to shrink payments — it lowers DTI while raising total cost.
Frequently asked questions
What is a good debt-to-income ratio?
At or below 36% (back-end) is the classic guideline; many mortgage programs allow up to about 43%, and FHA loans sometimes higher with strong compensating factors.
Is DTI calculated on gross or net income?
Gross — income before taxes. That surprises people: your real budget is tighter than your DTI makes it look.
Do utilities and groceries count in DTI?
No — only debt obligations: housing payment, loans, card minimums, and court-ordered payments like child support. Living costs aren't included, which is another reason a 'passing' DTI can still feel tight.
Estimates are informational only, not financial advice or an offer of credit — see our disclaimers.