Debt-to-income ratio (DTI), what it is and how to calculate it
What the debt-to-income ratio is, which debts count, the difference between front-end and back-end DTI, how lenders use it and how to lower it.
Debt-to-income (DTI) ratio calculator
Your debt-to-income ratio (DTI) shows how much of your gross monthly income goes to debt payments. Lenders use it to evaluate applications, especially for mortgages.
Fix the highlighted fields to see your result.
Your debt-to-income ratio (back-end DTI)—
- Monthly debt payments
- —
- Housing DTI (front-end)
- —
- Income left before taxes and other expenses
- —
How it is calculated
DTI = Monthly debt payments ÷ Gross monthly income × 100
The back-end DTI includes all debt payments. The front-end DTI considers only the housing payment. Living expenses such as food, utilities or gas do not count as debt.
Assumptions and limitations
- Each lender and each loan program defines which debts count, how income is calculated and what limits it accepts. There is no single limit for everyone.
- For a mortgage, the lender will use the full future payment (principal, interest, taxes, insurance and, if applicable, HOA and PMI), not your current rent.
- The result is informational: it does not indicate whether you will be approved.
This tool is educational and provides estimates. It is not a credit offer or financial advice. Actual terms are set by each institution.
How to read your DTI
The Consumer Financial Protection Bureau (CFPB) explains that a lower DTI suggests you have more room to take on a new payment, and that lenders combine it with your credit history, savings and employment to make a decision.
Beyond approval, DTI is useful for you: if a large share of your income is already committed to debt, any surprise expense weighs more. Lowering your DTI before applying for a large loan usually improves your options.
Ways to lower it
- Pay off debts with high monthly payments relative to their balance first.
- Avoid opening new credit before applying for a mortgage.
- Document all of your income, including self-employment income, so the lender can consider it.