What debt-to-income ratio measures
DTI is your total monthly debt payments divided by your gross (pre-tax) monthly income, shown as a percentage. It tells a lender how much of your income is already committed, and therefore how safely you could take on a new loan payment. Lower is better.
What counts as debt
Include recurring debt obligations: mortgage or rent, car loans, student loans, minimum credit-card payments, personal loans and child support. Do not include everyday costs like utilities, groceries, insurance or subscriptions — lenders look at debt obligations, not general spending.
The thresholds lenders use
As a rule of thumb, 36% or below is considered healthy, and many mortgage programs cap total DTI around 43% (some allow up to 50% with strong credit). Above that, approval gets harder and rates worsen. Lenders also look at a 'front-end' ratio — just housing costs over income — of about 28%.
How to lower your DTI
Two moves help: pay down balances to cut the monthly obligations in the top of the ratio, or raise qualifying income in the bottom. Avoid taking on new debt in the months before a mortgage application. This estimate uses gross income; verify with your lender, who may treat some items differently.
Frequently asked questions
What is a good debt-to-income ratio?
36% or below is generally considered healthy. Many mortgage lenders cap total DTI around 43%, and a front-end (housing-only) ratio near 28% is a common target.
What debts are included in DTI?
Recurring debt payments: mortgage or rent, auto and student loans, minimum credit-card payments, personal loans and child support. Utilities, groceries and insurance are not counted.
Is DTI based on gross or net income?
Gross — your income before taxes and deductions. This calculator uses gross monthly income, which is what lenders use.
How do I lower my DTI?
Pay down debt balances to reduce monthly payments, avoid new loans before applying, and increase documented income. Even paying off one small loan can move the ratio noticeably.