How this calculator works
Debt-to-income ratio compares how much of your gross (pre-tax) monthly income already goes toward debt payments. Lenders use it, alongside credit score and other factors, to gauge how much additional debt — like a mortgage or car loan — a borrower can reasonably take on.
There are two common versions: the front-end ratio counts only housing costs (rent or mortgage) against income, while the back-end ratio, usually just called "DTI," adds every other recurring debt payment on top. This calculator reports both from the same inputs.
The formulas
Back-end DTI = total monthly debt payments ÷ gross monthly income × 100Front-end DTI = housing payment ÷ gross monthly income × 100"Total monthly debt payments" here means housing plus car loan plus minimum credit card payments plus any other recurring debt. It does not include everyday living expenses like groceries or utilities, which are not debt.
Worked example: $6,000 gross monthly income
- Monthly debts: $1,500 rent + $300 car payment + $150 minimum card payments + $100 other debt = $2,050 total.
- Back-end DTI = 2,050 ÷ 6,000 × 100 = 34.17%.
- Front-end DTI = 1,500 ÷ 6,000 × 100 = 25%.
- A 34.17% back-end DTI falls at or under the 36% level many lenders view favorably, though every lender sets its own cutoff and considers other factors too.
Frequently asked questions
What counts as gross income?
Gross income is pay before taxes and other deductions — the number on an offer letter or the top line of a pay stub, not the amount that lands in a bank account after withholding.
What DTI do lenders usually look for?
As general guidance, many conventional mortgage lenders prefer a back-end DTI at or under 36%, and 43% is still cited informally as an upper comfort limit. Note that the hard 43% cap in the US qualified-mortgage rule was replaced in 2021 by a price-based test, so loans above 43% DTI can still qualify. Actual limits vary by lender and loan type — no ratio guarantees approval.
Does DTI include rent I pay, or only debt I owe?
Standard DTI calculations include your housing payment, whether that is rent or a mortgage, alongside other debts like car loans and credit cards, because housing is typically the largest recurring monthly obligation.
How can I lower my DTI?
Either increase gross income or reduce monthly debt payments, for example by paying down a credit card balance or a car loan faster. Reducing balances also tends to improve credit utilization, which can help credit scores independently of DTI.
How do I calculate DTI for a joint application with two incomes?
Add both applicants' gross monthly incomes together for the income figure, and both applicants' total monthly debt payments together for the debt figure, then divide as usual: back-end DTI = total monthly debt payments ÷ gross monthly income × 100. The calculator only totals whatever numbers you enter, so combining two people's income and debt before entering them produces a joint DTI the same way.