What is a good DTI ratio for a mortgage?

Most lenders prefer a back-end DTI ratio of 36% or less while some government loans (FHA) allow up to 43% or even 50% with compensating factors. A lower DTI generally means better interest rates.

What is the difference between Front-End and Back-End DTI?

Front-End DTI only considers your housing expenses (rent/mortgage) relative to income. Back-End DTI considers housing PLUS all other debts (credit cards, car loans, etc.). Lenders look at both, but Back-End is usually more important.

Does DTI include utilities?

No. DTI calculations typically exclude variable living expenses like utilities, groceries, and entertainment. They only focus on fixed debt obligations and housing costs.

How can I lower my DTI quickly?

You can lower your DTI by either increasing your income (side hustle, raise) or decreasing your debt (paying off small credit card balances completely to remove that minimum monthly payment).

DTI Calculator | Debt-to-Income Ratio Calculator | Finmato

The Golden Number for Loan Approval

When you apply for a mortgage or loan, there is one number that matters more than your credit score: your Debt-to-Income (DTI) Ratio. This percentage tells lenders how much of your monthly income is already "spoken for" by debt. If your DTI is too high, even a perfect credit score won't get you approved. Our calculator helps you know exactly where you stand before you talk to a bank.

What is DTI?

**DTI (Debt-to-Income)** measures the percentage of your gross monthly income that goes toward paying debts. Low DTI demonstrates a good balance between debt and income.

Front-End Ratio

Also known as the "Housing Ratio," this only counts your proposed mortgage payment (PITI: Principal, Interest, Taxes, Insurance) divided by gross income.

Target: < 28%

Back-End Ratio

The "Total Debt Ratio." It counts proposed housing PLUS all other debts (credit cards, student loans, car payments, child support).

Target: < 36%

How to Use This Tool

Be honest with your numbers for the most accurate result:

Income: Enter your Gross Monthly Income (before taxes). Include salary, bonuses, and reliable side income.
Housing: Enter your current rent or estimated future mortgage payment (including property tax and insurance).
Debts: Enter sum of minimum monthly payments for credit cards, student loans, auto loans, and other personal loans.

The calculator will instantly show your Front-End and Back-End ratios and indicate if you are in the "Green Zone" (Approved), "Yellow Zone" (Caution), or "Red Zone" (Risky).

Mortgage Qualification

Conventional loans (Fannie Mae/Freddie Mac) strictly limit Back-End DTI to 45% or 50%. Using this tool helps you adjust your budget before applying.

Car Buying

Adding a $600 car payment might push your DTI from 35% to 42%, potentially ruining your chances of buying a house next year. Always check DTI impact first.

Debt Consolidation

If your DTI is over 50%, you are likely "house poor" or overleveraged. This signal means you should prioritize aggressive debt repayment.

Frequently Asked Questions

What debts should I include?

Include all recurring monthly debt payments: Credit cards (minimum payment), student loans, auto loans, personal loans, alimony, and child support. Do NOT include groceries, utilities, gym memberships, or insurance (unless part of mortgage).

Can I get a loan with 50% DTI?

It is possible but difficult. FHA loans sometimes allow up to 57% DTI with strong compensating factors (like large cash reserves). However, you will be seen as a high-risk borrower.

What income counts?

Lenders look for stable, documented income. W-2 salary is easy. Self-employed income usually requires a 2-year average from tax returns. Commission and bonuses also typically require a 2-year history.

Does rent count as debt?

For the purpose of calculating DTI for a *new* mortgage, your current rent is replaced by the *new* mortgage payment. However, if you are applying for a car loan, your rent is considered a fixed obligation.

Lending Disclaimer

DTI requirements vary by lender and loan program. This tool provides an estimate but does not guarantee loan approval.

Data Privacy

We do not store your financial data. This calculator runs entirely in your browser.

DTI Calculator

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