Debt-to-Income Ratio Calculator

What this debt-to-income calculator does

Debt-to-income ratio, or DTI, compares your monthly debt payments with your gross monthly income. Lenders use DTI to judge whether you can take on a new loan or mortgage.

This calculator reports two ratios. The front-end ratio includes housing costs. The back-end ratio includes housing plus all other recurring debt payments.

How to use this calculator

1. Enter your gross monthly income before taxes.
2. Enter your monthly housing payment, such as rent or a mortgage payment.
3. Enter other monthly debt payments, such as car loans, student loans, and minimum credit card payments.
4. Click Calculate.

The default example has $6,000 of monthly income, a $1,500 housing payment, and $500 of other debt. The front-end ratio is 25.00% and the back-end ratio is 33.33%.

DTI formula

Front-end DTI = Housing payment / Gross monthly income × 100
Back-end DTI = (Housing payment + other monthly debt) / Gross monthly income × 100

The back-end ratio is usually the more important measure for a mortgage application because it includes all recurring debt.

What the results include

• Front-end DTI: housing cost as a percentage of income.
• Back-end DTI: total debt as a percentage of income.
• Total monthly debt: housing plus other debt.
• Remaining income: income left after debt payments.
• Status: a simple label based on the back-end ratio.

The status labels are a general guide: 36% or less is manageable, above 36% through 43% is caution, and above 43% is high.

Assumptions and limitations

The calculator uses gross income before taxes and does not include taxes, insurance, HOA dues, utilities, or living expenses. It assumes the payments you enter are the minimum required monthly amounts. Lenders may count debts differently, especially student loans, credit cards, and rental income.

Frequently asked questions

What DTI do lenders look for?

Many conventional lenders prefer a back-end DTI of 36% or less, but programs and individual lenders can allow higher ratios. FHA and VA loans often permit higher back-end ratios.

Is front-end or back-end DTI more important?

The back-end ratio is usually more important because it includes all recurring debt. The front-end ratio shows how much of your income goes to housing.

Should I use gross or net income?

Use gross monthly income before taxes and deductions. Lenders generally calculate DTI from gross income.

Does rent count as debt?

Rent is treated as a housing payment for the front-end ratio and as a recurring obligation for the back-end ratio. The calculator uses the housing payment you enter.

Source

References:

• Consumer Financial Protection Bureau — What is a debt-to-income ratio?
• Consumer Financial Protection Bureau — Owning a Home

Disclaimer

This calculator is for informational purposes only. It is not a loan offer or financial advice. Lender guidelines vary, so confirm the ratio requirements with your lender.