Use our Debt-to-Income Ratio Calculator to quickly measure how much of your gross monthly income goes toward housing and other debt payments. Knowing your DTI helps you compare yourself with common lending guidelines, set a budget, and plan your next financial move.
What is a Debt-to-Income (DTI) ratio?
Your debt-to-income ratio is the percentage of your gross monthly income that is used to pay monthly debt obligations. Lenders rely on DTI as a snapshot of your capacity to take on new credit, especially for mortgages and auto loans. A lower DTI generally signals a stronger ability to manage payments, while a higher DTI can limit how much you can borrow or the programs you qualify for.
Two types of DTI: Front-end and Back-end
- Front-end DTI: Housing-only costs divided by gross monthly income. Housing costs typically include mortgage or rent, property taxes, homeowners insurance, and HOA dues.
- Back-end DTI: All monthly debt payments divided by gross monthly income. This combines your housing costs with student loans, auto loans, credit card minimums, and other recurring debts.
How to use the Debt-to-Income Ratio Calculator
- Enter your gross monthly income before taxes and deductions.
- Add your monthly housing costs: mortgage or rent, plus property taxes, homeowners insurance, and HOA dues if applicable.
- Enter other monthly debts such as student loans, auto loans, credit card minimum payments, and any other recurring obligations.
- Click Calculate to see your front-end and back-end DTI percentages.
Our Debt-to-Income Ratio Calculator instantly computes your housing cost (front-end) and your total debt load (back-end) as a percentage of your gross income. Results are meant for planning and comparison with common guidelines, not as a loan approval.
What is a good DTI ratio?
Different lenders and loan programs use different benchmarks, but these ranges are commonly referenced:
- Front-end DTI: At or below about 28% is traditionally viewed as favorable for many conventional mortgages.
- Back-end DTI: At or below about 36% is a classic guideline, though some programs may allow higher ratios with compensating factors like strong credit, larger down payments, or significant cash reserves.
Remember: Guidelines aren’t guarantees
Even if your DTI is a bit higher than the traditional thresholds, some lenders may still approve you based on the overall strength of your application. Likewise, a low DTI doesn’t guarantee approval if other parts of your profile are weak. Treat DTI as one important piece of your financial picture.
What debts are included?
For back-end DTI, lenders generally include recurring monthly obligations that appear on your credit report or are court-ordered. Examples include:
- Mortgage or rent, property taxes, homeowners insurance, HOA dues
- Student loan payments
- Auto loans and leases
- Credit card minimum payments
- Other installment loans or documented obligations
Every lender can apply its own rules. For instance, certain utilities or discretionary expenses may not be included. The Debt-to-Income Ratio Calculator focuses on the most common obligations so you can quickly estimate where you stand.
Tips to improve your DTI
- Increase income: Pursue additional hours, freelance work, or higher-paying roles to boost your gross monthly income.
- Reduce debt balances: Paying down revolving balances can decrease your minimum payments and your DTI.
- Avoid new debt: Postponing new loans or large purchases can keep your DTI lower.
- Refinance or consolidate: If available, refinancing to a lower rate or consolidating at better terms can reduce monthly payments.
- Shop housing carefully: A modest housing payment can dramatically improve your front-end and back-end DTI.
Limitations and assumptions
Our calculator uses the figures you enter and simple arithmetic to produce your ratios. It doesn’t pull your credit, verify income, or incorporate all the nuances of underwriting guidelines. Treat your results as an estimate. If you’re preparing to apply for a loan, consult a lender who can evaluate your full profile.
Use the Debt-to-Income Ratio Calculator regularly as your finances change. As debts are paid down or income grows, your DTI can improve, potentially opening doors to better loan options and rates.