Debt-to-Income Ratio Calculator

What this calculator answers

What share of your gross income goes to debt payments each month, counted two ways: housing alone (the front-end ratio) and housing plus every other debt payment (the back-end ratio, which matches the CFPB’s definition of DTI). Enter the limits your lender quotes and it also tells you how far you are from each one, how much you could add in new payments, or what would have to change to get within them. It is for anyone getting ready to apply for a mortgage, car loan or other credit, or checking their own debt load. Borrowing for a business or a rental property? A DSCR (debt service coverage ratio) calculator covers that ratio.

How to calculate your debt-to-income ratio

Add up your monthly debt payments and divide by your gross monthly income: that is the back-end ratio. Divide the housing payment alone by the same income for the front-end ratio. Multiply by 100 to read either one as a percentage.

$$\text{Front-end DTI} = \frac{H}{I} \times 100 \qquad \text{Back-end DTI} = \frac{H + D}{I} \times 100$$

• $H$ is your monthly housing payment: rent, or the whole mortgage payment.
• $D$ is everything else you pay each month on debts: car and student loans, card minimums and the like.
• $I$ is your gross monthly income, before taxes and deductions.

Income paid on another schedule has to be turned into a monthly figure first: a yearly salary ÷ 12, pay every two weeks × 26 ÷ 12, weekly pay × 52 ÷ 12. The calculator does this for every amount, including debts you pay quarterly or once a year.

How to use the calculator

• Gross income: your pay before taxes and deductions, at whatever frequency is easiest: a yearly salary from an offer letter, or the gross amount on a pay stub with its pay schedule. If it looks like the wrong period (a monthly figure left on Yearly), a note under the field says so.
• Co-borrower income (optional): only if someone will apply with you. Add their debts to the list too.
• Monthly housing payment: your rent, or your full mortgage payment including property tax, homeowners insurance, mortgage insurance and HOA dues. If you’re preparing a mortgage application, enter the payment you expect on the new home rather than your current rent. Enter 0 if you have no housing cost.
• Other debt payments: one row per debt, with its type, an optional description and the payment with how often you pay it. Use the minimum payment on a card statement, not the balance. Add debt adds a row, and Paste rows takes several at once from a spreadsheet.
• Your lender’s limits (optional): the front-end and back-end maximums your lender or loan program quotes, in percent. The example’s 28% and 36% are placeholders; replace them with the limits you’re given.

Results update as you type, and each Try button loads one of the cases in the sections below. To compare today with a change, such as a debt paid off or a planned mortgage payment, press Save for comparison, change the inputs and save again. Continue in the Home Affordability Calculator takes your income, other debts and limits to the page that turns them into a home price.

Worked example: $84,000 a year, $1,650 rent and three debts

Say you earn $84,000 a year before tax, pay $1,650 a month in rent and have a $295 student loan payment, a $70 minimum on a credit card and a $160 personal loan payment. Your lender quotes limits of 28% and 36%.

1. Gross monthly income: $84,000 ÷ 12 = $7,000.00.
2. Other debt payments: $295 + $70 + $160 = $525.00.
3. All monthly debt payments: $1,650 + $525 = $2,175.00.
4. Front-end DTI: $1,650 ÷ $7,000 = 0.2357, or 23.6%.
5. Back-end DTI: $2,175 ÷ $7,000 = 0.3107, or 31.1%.
6. Against the back-end limit: 36% of $7,000 is $2,520.00 of payments a month, so there is room for $345.00 a month of new debt payments.
7. Against the front-end limit: 28% of $7,000 is $1,960.00. The back-end limit would allow $2,520 − $525 = $1,995.00 for housing, so the front-end limit is the tighter one: the highest housing payment within both is $1,960.00, $310.00 more than the rent.

Both ratios are under the limits, by 4.4 and 4.9 percentage points.

Front-end vs. back-end DTI

The front-end ratio counts only your housing payment; the back-end ratio counts housing plus every other debt payment, so it is always at least as high. Freddie Mac calls the first the housing expense ratio, and USDA’s rules for its single-family home loans call it the PITI ratio. Fannie Mae’s Selling Guide sets its maximums on the back-end ratio, while USDA’s rules check both. The CFPB’s definition of DTI, all monthly debt payments over gross income, is the back-end ratio, so that is the one to compare when a lender quotes a single number.

The two limits interact. A new car payment raises only the back-end ratio; a bigger mortgage payment raises both. That is why the calculator’s highest housing payment is the lower of two figures: the front-end limit times income, and the back-end limit times income minus your other debts.

What counts as debt (and what doesn’t)

Lenders count payments you are obliged to make on debts and similar commitments, not everyday living costs. The left column follows the obligations Fannie Mae’s Selling Guide lists; the right one holds costs that USDA’s rules leave out or that neither list names. Individual lenders can be stricter.

A few cases trip people up:

• Credit cards: the minimum payment due, not the balance or what you choose to pay. If no minimum is reported, a lender may use a percentage of the balance instead.
• Student loans with a $0 payment: a loan in deferment or forbearance still counts. Lenders have rules for the payment to use; ask yours.
• Leases: a car lease counts however few months are left on it.
• Nearly paid-off loans: Fannie Mae lets lenders leave out an installment loan with ten or fewer payments left, unless the payment is large enough to strain your budget.
• Debts someone else pays: a loan in your name that another person has been documented as repaying may be left out.

What counts as income

Use your gross income: what you earn before taxes, retirement contributions, health premiums and other deductions come out. Lenders also want income that is stable, documented and likely to continue, so a one-off bonus or a side job that just started may not count toward a loan even though it is real money to you. If part of your income isn’t taxed, a lender may increase it by a set percentage (“gross it up”) before working out the ratios; your lender will tell you whether that applies. Using take-home pay instead gives a higher, wrong ratio (see the mistakes below).

What is a good debt-to-income ratio?

There is no single good number: each lender and loan type sets its own limits, as the CFPB points out. The useful question is how your ratios compare with the limits you are quoted, and that is what the calculator shows once you enter them. It doesn’t label ratios good or bad on its own. A lower ratio leaves more room for a new payment and for surprises, and the “Room” and “Highest housing payment” figures turn the gap into dollars a month.

Because limits differ from one program to the next, check the current figure with your lender rather than relying on a rule of thumb.

How to lower your DTI

• Pay off a whole debt. The back-end ratio falls only when a payment goes away or gets smaller. With the $420 car loan example, which adds a $420 car payment to the worked example, the back-end DTI is 37.1%, 1.1 points over 36%. The “What each debt adds” table shows that paying off the student loan would bring it to 32.9% and the personal loan to 34.8%, both within the limit, while paying off the card alone would leave it at 36.1%.
• Cut the payment, not just the balance. A fixed loan payment stays the same until the loan is paid off, so paying part of it early doesn’t help this ratio. On a card, paying down the balance helps only as far as it lowers the minimum payment due.
• Change the housing payment. A cheaper home, a larger down payment or a longer loan term lowers both ratios. The “Ratios at other housing payments” table shows the effect in $250 steps.
• Raise the income that counts. A raise, or a co-borrower with their own income, lowers both ratios. In the car example, a gross income of $7,208.34 a month ($86,500.00 a year) would bring the back-end ratio within 36%.

Refinancing or consolidating debts into a longer loan can lower the monthly payment but can raise the total interest you pay, so weigh both.

More examples

The Try buttons load these cases over the worked example.

• Paid every 2 weeks: $3,100 every two weeks is 26 paychecks a year, so $3,100 × 26 ÷ 12 = $6,716.67 a month. The ratios are 24.6% front-end and 32.4% back-end, with $243.00 of room under 36%.
• Co-borrower: someone earning $3,800 a month with a $310 car payment applies with you, so income becomes $10,800.00 and other debts $835.00, giving 15.3% and 23.0%.
• $2,300 mortgage: a $2,300 mortgage payment instead of the rent gives 32.9% front-end and 40.4% back-end, 4.9 and 4.4 points over the limits. The highest housing payment within both limits stays $1,960.00, set by the front-end limit, so this payment is $340.00 a month too high.
• No other debts: both ratios are 23.6%, and there is $870.00 of room under 36%.

Reading the result

• Back-end DTI is the headline: every monthly debt payment, housing included, as a share of gross monthly income. Front-end DTI is housing alone.
• Against the limits you entered shows, for each limit, how many percentage points you are under or over it. Under the back-end limit it gives the room for new debt payments, rounded down to the cent; over it, the monthly cut or the gross income that would get you within it, rounded up. Highest housing payment is the most housing that fits both limits with your other debts as they are.
• The bar and its list split your gross monthly income into the housing payment, each debt and the rest. Each share is that payment’s part of the ratio: in the example, housing is 23.6% and the student loan 4.2%.
• What each debt adds to your DTI lists each debt’s monthly amount, its share of income and the back-end ratio if it were gone, with whether that would be within your back-end limit. The last row takes away every other debt at once.
• Ratios at other housing payments repeats the calculation with the housing payment $250 to $1,000 higher or up to $500 lower. In the example, a $2,150 payment would give 30.7% and 38.2%, $155.00 over the back-end limit.

Near a limit, a ratio is shown with more decimals so it never looks equal to a limit it is over: 36.04% rather than 36.0% next to a 36% limit.

Assumptions and limitations

• Every amount is taken as you enter it; the calculator doesn’t check a credit report. Lenders use verified figures and can count some debts differently, such as a card with no reported minimum.
• A ratio exactly at a limit counts as within it.
• It treats all income you enter as income that counts. A lender may leave out income it can’t document or doesn’t expect to continue.
• The ratios measure payments against gross income only. They don’t include taxes, living costs or savings, so a payment that fits a lender’s limit can still be too much for your budget.
• It is an educational estimate, not a loan approval or pre-approval.

Common mistakes

• Dividing by take-home pay. DTI uses gross income. If the example’s $7,000 gross became $5,450 take-home, the back-end ratio would read 39.9% instead of 31.1%.
• Entering a card balance instead of the minimum payment. Putting the card’s $3,400 balance in place of its $70 minimum would make the example’s back-end ratio 78.6%.
• Counting living costs as debts. Utilities, phone, groceries and insurance premiums outside the housing payment are not debt payments.
• Using rent on a mortgage application. For a home you’re buying, lenders use the new payment, including taxes, insurance, PMI and HOA dues.
• Treating pay every two weeks as twice a month. Every two weeks is 26 paychecks, not 24. Counting $3,100 as $6,200 a month instead of $6,716.67 pushes the back-end ratio from 32.4% to 35.1%.
• Mixing a yearly salary with monthly debts. Divide a salary by 12 first, or choose Yearly next to the income.