About this calculator
Debt to income ratio is one of the first things a mortgage lender checks. It does not look at whether you are a good bill payer, only whether your existing obligations leave room for a new mortgage payment. Knowing your number before you apply makes the difference between a confident offer and a declined application.
How it works
The front-end ratio divides housing costs by gross income, the way a quick affordability check works. The back-end ratio adds all your other monthly debt. Lenders care most about the back-end number, and the 43% threshold is the common ceiling for conventional loans.
Frequently asked questions
What is a good debt to income ratio?
For a mortgage, 36% or below is comfortable, 36 to 43% is generally acceptable, and above 43% is difficult for most conventional lenders. For general financial health, lenders like to see consumer debt under 15% of income.
What is the 43% debt to income rule?
It is the standard ceiling on total monthly debt divided by gross monthly income for a qualified mortgage. Exceeding 43% usually means a conventional loan is unavailable and you need a co-borrower, a larger down payment, or a different loan product.
How do lenders calculate debt to income?
They divide your total monthly debt obligations by your gross monthly income. Housing costs, auto loans, student loans, and credit card minimums count. Income is taken before tax, which makes the ratio more forgiving than a take-home calculation.
Does paying off debt lower my DTI?
Yes, immediately. Any payment you eliminate reduces your total monthly debt, so the ratio falls without any change to your income. Paying off a car loan can make the biggest difference because car payments are large relative to student loans.
What counts as income for DTI?
Lenders use gross income before tax and usually add documented bonuses, overtime, and rental income. Self-employment income is averaged over the prior two years and often requires tax returns and business statements as proof.
Can I buy a house with high DTI?
Possibly. Paying down debt for several months before applying, adding a co-borrower with income, or making a larger down payment can all help. FHA loans allow higher ratios, typically up to around 57% including total debt.