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Mortgage Debt-to-Income (DTI) Calculator

Determine your eligibility for a home loan based on your income and debts.

Include salary, bonuses, alimony received, etc.
Principal, Interest, Taxes, and Insurance.
Minimum payments for cars, student loans, credit cards, etc.

Understanding Your Debt-to-Income (DTI) Ratio for Mortgage Approval

When applying for a mortgage, your credit score isn't the only number lenders scrutinize. Your Debt-to-Income (DTI) ratio is a critical metric used to assess your ability to manage monthly payments and repay the proposed loan. It measures the percentage of your gross monthly income that goes toward paying debts.

Lenders use the DTI ratio to determine the level of risk associated with lending to you. A lower ratio indicates a good balance between debt and income, while a higher ratio suggests that you might become overleveraged if you take on a mortgage.

The Two Types of DTI Ratios

This calculator provides you with both types of DTI ratios lenders review:

  1. Front-End Ratio (Housing Ratio): This calculates the percentage of your gross income that would go specifically toward your new housing costs. This includes principal, interest, property taxes, homeowners insurance, and any HOA dues (often collectively called PITI). Lenders generally prefer a front-end ratio of 28% or lower.
  2. Back-End Ratio (Total DTI): This is usually the more important figure. It calculates the percentage of your gross income that goes toward all your monthly debt obligations. This includes the proposed new mortgage payment plus other debts like car loans, student loans, credit card minimums, and alimony. Lenders generally prefer a back-end ratio of 36% or lower, though many conventional and FHA loans will allow up to **43%** (and sometimes up to 50% with strong compensating factors).

How to Use This Calculator

To get an accurate picture of where you stand, you need to input realistic figures:

  • Gross Monthly Income: This is your income before taxes and deductions. If you earn an annual salary of $84,000, your gross monthly income is $7,000. Include consistent bonus, overtime, or investment income.
  • Proposed Monthly Mortgage Payment (PITI): Estimate what your total housing payment will be. Don't just include the loan repayment; you must include estimated property taxes and insurance premiums.
  • Other Total Monthly Debt Payments: Sum the minimum monthly payments required on your credit reports. Do not include expenses like utilities, groceries, or phone bills. Only include debt obligations like auto loans, student debt, credit card minimums, and personal loans.

Example Calculation

Let's look at an example scenario of a prospective homebuyer:

  • Gross Annual Salary: $90,000 ($7,500 per month)
  • Proposed Mortgage PITI: $2,100 per month
  • Car Loan Payment: $450 per month
  • Student Loan Payment: $300 per month
  • Credit Card Minimums: $150 per month

Step 1: Calculate Total Other Debt: $450 + $300 + $150 = $900/month.
Step 2: Calculate Total Monthly Obligations: $2,100 (Mortgage) + $900 (Other Debt) = $3,000.
Step 3: Calculate DTI: ($3,000 / $7,500) * 100 = 40% Back-End DTI.

In this scenario, with a 40% DTI, the borrower likely qualifies for most conventional and FHA mortgage products, provided their credit score and down payment also meet requirements.

If your DTI is too high, consider strategies to lower it before applying, such as paying off smaller debts to eliminate their monthly payments or increasing your income through a side job or promotion.

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