DTI Ratio Calculator
Your debt-to-income (DTI) ratio compares your monthly debt payments to your gross monthly income. Lenders use it to gauge your ability to manage payments. This tool calculates both back-end DTI and shows how lenders view your numbers.
How it works
DTI ratio is calculated by dividing your total monthly debt payments by your gross monthly income, then multiplying by 100 to get a percentage. The formula is: DTI = (Total Monthly Debt / Gross Monthly Income) × 100.
There are two types: front-end DTI counts only housing costs, while back-end DTI includes all recurring debts like car loans, credit cards, and student loans. Most mortgage lenders focus on back-end DTI and prefer it to be 43% or lower.
Tips
To lower your DTI, pay down high-balance debts, avoid taking on new loans before applying for a mortgage, and consider increasing your income. A DTI under 36% gives you the strongest position with lenders and often qualifies you for better interest rates.
FAQ
What is a good DTI ratio?
A back-end DTI of 36% or less is considered excellent. Many lenders accept up to 43%, and some qualified mortgages allow up to 50% with strong compensating factors like a high credit score.
What's the difference between front-end and back-end DTI?
Front-end DTI includes only your housing payment relative to income, while back-end DTI includes all monthly debt obligations. Lenders weigh back-end DTI more heavily for loan approval.
Does DTI use gross or net income?
DTI uses gross income — your total earnings before taxes and deductions. Always enter your pre-tax monthly income for an accurate result.