Debt-to-Income (DTI) Calculator
Your debt-to-income ratio is one of the most important factors lenders use to determine mortgage eligibility. Calculate your DTI to see where you stand before applying for a home loan.
Understanding DTI Ratios
Front-End DTI (Housing Ratio): This measures what percentage of your gross monthly income goes toward housing costs only — your mortgage payment including principal, interest, taxes, and insurance (PITI), plus any HOA fees.
Back-End DTI (Total Debt Ratio): This includes all your monthly debt obligations — housing costs plus car payments, student loans, credit card minimum payments, personal loans, alimony, and child support.
DTI Requirements by Loan Type
| Loan Type | Front-End Max | Back-End Max |
|---|---|---|
| Conventional | 28% | 36-45% |
| FHA | 31% | 43% |
| VA | No limit | 41% |
| USDA | 29% | 41% |
Note: Lenders may approve higher DTIs with compensating factors like excellent credit, large cash reserves, or significant down payments.
How to Improve Your DTI
- Pay down debt: Focus on credit cards and car loans first — they have the biggest impact.
- Increase income: A raise, side job, or second income can significantly lower your DTI.
- Avoid new debt: Don't finance new purchases before applying for a mortgage.
- Consider a less expensive home: A smaller mortgage means a lower DTI.
- Make a larger down payment: This reduces your loan amount and monthly payment.
- Pay off small debts: Eliminating a $200/month car payment can significantly impact your ratio.
Frequently Asked Questions
What debts are included in DTI?
Monthly payments for: mortgages/rent, car loans, student loans, credit card minimums, personal loans, alimony, child support. NOT included: utilities, insurance (except homeowners), groceries, gas, subscriptions, or other variable expenses.
Does rent count toward DTI when buying?
No. When calculating DTI for a new mortgage, lenders use your proposed new housing payment, not your current rent. Your rent will be replaced by the new mortgage payment.
What if my DTI is too high?
Consider paying down debts before applying, looking at less expensive homes, or exploring FHA loans which have more flexible DTI requirements. You might also add a co-borrower with additional income.