DTI Calculator
Calculate your debt-to-income ratio and find what mortgage payment lenders will approve. Conventional loans allow up to 50% with automated approval.
Reviewed & updated for 2026 by Rakesh Choudhary, PhDMethodology & sources · How we calculate
DTI thresholds by loan type
| Loan type | Max DTI | Notes |
|---|---|---|
| Conventional (Fannie/Freddie) | 36-50% | 36% manual (45% with credit and reserves); 50% through automated underwriting |
| FHA | 43-50% | Manual underwriting: 31% housing / 43% total, up to 40/50 with two compensating factors and a 580+ score |
| VA | 41% | A guideline, not a cap; VA uses DTI and a residual-income test together |
| USDA | 29/41% | 29% housing, 41% total; can be exceeded with compensating factors |
| Jumbo | 38-43% | Stricter, requires reserves |
What counts as debt and what doesn't
Lenders count debt that appears on your credit report and represents a recurring obligation: mortgage or rent (current rent only if you're staying, not if you're moving), car loans and leases, student loans (conventional loans use the payment on your credit report, even a documented $0 income-driven payment, and for deferred loans 1% of the balance or the full payment), credit card minimums (using actual statement minimums), personal loans, alimony, and child support. Co-signed debts count unless you can show the other person is the one repaying them.
What doesn't count: utilities, cell phone, insurance premiums (except as part of PITI in housing), groceries, gas, daycare, 401(k) loans (you owe yourself), and installment debt with 10 or fewer payments left at the time of application (lease payments always count). That last one is a tactical lever, pay down a car loan to 10 months or fewer remaining and the payment can drop out of your DTI calculation.
Income side has its own rules. Base salary and consistent overtime are easy. Bonus and commission income require a 2-year history and use a 24-month average. Self-employment income looks at net (after expenses) on tax returns averaged over 2 years, meaning aggressive write-offs that lowered taxable income now lower your borrowing capacity. Rental income from existing properties counts at 75% of gross rents (the 25% haircut covers vacancy and maintenance).
Worked example: how much house can you actually afford
A household with $9,000 gross monthly income, $450 car payment, $200 student loans, $100 credit card minimums has $750 in non-housing debt. To stay at 43% total DTI, max total debt is $3,870, leaving $3,120 for PITI (principal, interest, taxes, insurance). At 2026 average 30-year mortgage rates around 6.5%, factoring in property taxes (~1% annually) and homeowner's insurance, the household can afford a home around $440,000-$465,000 depending on tax rate and PMI requirements.
Pay off that $450 car loan and the picture shifts dramatically: now $3,570 is available for PITI, supporting roughly $510,000 in home price, about $50,000 more house. Conversely, taking on a new $400 car loan during the application process can drop affordability by $45,000+ on the same income. This is why mortgage lenders explicitly warn against opening new credit or large purchases during underwriting.
The 28/36 rule (front-end max 28%, back-end max 36%) is the old conservative guideline that still produces the safest borrowers. Modern qualifying ratios are looser: conventional up to 50% through automated underwriting, FHA up to 50% with compensating factors when manually underwritten. But qualifying for a higher payment and being able to afford it comfortably are different questions. The 28/36 borrower has slack for emergencies; the 50% DTI borrower lives one major repair away from trouble.
Five ways to improve DTI before applying
- Pay off small debts first: A $200/month credit card with $1,800 balance contributes more to DTI than its size suggests. Killing it raises affordability by $30,000+ in home price.
- Refinance high-payment debts: A 4-year car loan refinanced to 7 years cuts the payment by 30-40%, reducing DTI on paper (but costing more in total interest). Useful when the trade-off is qualifying or not.
- Add a co-borrower: A spouse, partner, or family member's income gets added to total income, often lowering DTI dramatically. Their debts also get added, so the math depends on their balance sheet.
- Use the right student loan calculation: Federal income-driven repayment plans can produce very low official payments. Conventional loans accept the payment on your credit report, including a documented $0 income-driven payment; each loan type has its own rule, so ask how yours is counted.
- Avoid new debt 6 months pre-application: Opening a credit card, buying a car, or financing furniture in the 6 months before applying changes your DTI and your credit utilization. Both can lower your loan amount or your rate.
FAQs
What is DTI?
Debt-to-Income ratio compares your monthly debt payments to your gross monthly income. Formula: DTI = Total monthly debts / Gross monthly income × 100. Lenders use DTI to evaluate mortgage applications. Lower DTI = stronger borrower.
What's a good DTI for a mortgage?
Conventional (Fannie Mae): 36% if manually underwritten, up to 45% with strong credit and reserves, and 50% through its automated underwriting. FHA manual underwriting: 43%, up to 50% with compensating factors. VA: 41% is a guideline, used together with a residual-income test. The 43% federal cap on qualified mortgages ended when the CFPB replaced it with a price test (compliance required from October 1, 2022). Ideal DTI: under 36% gives best rates. Under 28% front-end (housing only) is the gold standard.
What's front-end vs back-end DTI?
Front-end (housing ratio): just your housing expense (PITI) ÷ gross monthly income. Lenders prefer under 28%. Back-end (total DTI): ALL debt payments (housing + cars + student loans + minimums) ÷ income. Most conventional loans now allow up to 45-50%. Back-end is the binding constraint for most borrowers.
Does rent count in DTI?
Current rent doesn't count for mortgage DTI because you'll stop paying it when you move into the new home. Only the NEW housing expense (PITI) counts. Other debts (cars, student loans, credit cards) DO count regardless of current housing.
How do I lower my DTI?
Three options. (1) Pay off debts, even one car loan can drop DTI 5-10%. (2) Increase income, get a raise, side hustle. (3) Wait for student loan changes. Refinancing existing debts to lower rates also helps. Avoid taking on new debt 6-12 months before applying for a mortgage.