How DTI is calculated
Your debt-to-income ratio is your total monthly debt payments divided by your gross monthly income:
DTI % = Total monthly debt ÷ Gross monthly income × 100
With $2,000 of monthly debt on $6,000 of gross income, the DTI is $2,000 ÷ $6,000 = 33%. Lenders use this single number as a quick read on whether you can comfortably take on a new payment.
Front-end vs. back-end
- Front-end DTI counts only your housing payment against income — what a lender uses to size a mortgage.
- Back-end DTI counts all recurring debt: housing plus car, student, and credit card payments. This is the figure most lenders weigh.
What lenders look for
| Back-end DTI | How it's viewed |
|---|---|
| 36% or less | Healthy — most lenders are comfortable |
| 37% – 43% | Manageable — the common upper limit for many mortgages |
| 44% – 49% | High — borrowing gets harder and costlier |
| 50% or more | Very high — focus on paying down debt first |
Include rent or your full mortgage, auto and student loans, and credit card minimums — but not utilities, groceries, or insurance. Use gross income, the figure before taxes, to match how lenders calculate.
Frequently asked questions
How do you calculate debt-to-income ratio?
Add up your total monthly debt payments — housing, car, student loans, and minimum credit card payments — then divide by your gross monthly income and multiply by 100. If you pay $2,000 in debt on $6,000 of monthly income, your DTI is about 33%.
What is a good debt-to-income ratio?
Lenders generally like to see a back-end DTI of 36% or less, and many mortgage programs allow up to 43%. Below 36% is considered healthy, 37–43% is manageable but watched closely, and 44% or more can make borrowing difficult or more expensive.
What is the difference between front-end and back-end DTI?
Front-end DTI counts only housing costs — rent or mortgage, property tax, and insurance — against your income. Back-end DTI counts all recurring debt, including housing plus car loans, student loans, and credit cards. Lenders look most closely at the back-end ratio.
What counts as debt in the DTI calculation?
Include your rent or full mortgage payment, auto loans, student loans, personal loans, child support or alimony, and the minimum payments on credit cards. Do not include everyday living expenses like groceries, utilities, gas, insurance premiums, or streaming subscriptions.
Should I use gross or net income?
Use gross income — your pay before taxes and deductions. Lenders calculate DTI on gross monthly income, so using your take-home pay would overstate your ratio and not match how a lender evaluates you.
Disclaimer: DTI thresholds vary by lender and loan program. This calculator provides an estimate for educational purposes only and is not a lending decision or financial advice.