LoanReady

Debt-to-Income Ratio Calculator

The number lenders look at first — how much of your income is already spoken for by debt payments.

Monthly debt payments

Gross monthly income

What you entered

Monthly debts: $1,200Monthly income: $5,000

1
DTI ratio = monthly debt ÷ gross income × 100
$1,200.00 / $5,000.00 × 100= 24.00%
2
Rating (≤20 Excellent, ≤36 Good, ≤43 Acceptable, >43 High)
24.00%= Good

Result

DTI ratio: 24%

Your debt-to-income ratio is 24% (Good). Lenders generally prefer a DTI below 36% for mortgage approval.

Debt-to-income ratio at common debt and income levels

DTI divides your total monthly debt payments by gross monthly income. Each row runs one pairing through that division and applies the rating bands this calculator uses.

Monthly debt payments	Gross monthly income	DTI	Rating
$500	$4,000	12.5%	Excellent
$1,000	$6,000	16.7%	Excellent
$1,000	$4,000	25.0%	Good
$2,500	$8,000	31.3%	Good
$2,000	$6,000	33.3%	Good
$1,500	$4,000	37.5%	Acceptable
$2,000	$4,000	50.0%	High
$3,000	$6,000	50.0%	High

The thresholds that matter in practice are 36% and 43%. Most conventional mortgage underwriting prefers total DTI at or below 36%, and 43% is the usual ceiling for a qualified mortgage, though some programmes stretch further with compensating factors. Count the payments a lender counts: mortgage or rent, car loans, student loans, minimum credit card payments, child support. Do not count utilities, groceries, insurance or subscriptions. Income is gross, before tax. The fastest way to move the ratio is usually to clear a small loan entirely rather than to pay a little extra across several.

Why 36% and 43% are magic numbers

Most conventional lenders prefer a DTI below 36%, and the qualified mortgage (QM) rule caps it at 43%. FHA loans may allow up to 50% with compensating factors. Your DTI directly determines how large a mortgage you can qualify for.

What counts as 'debt'

Include all recurring minimum payments: mortgage/rent, car loans, student loans, credit card minimums, child support, and personal loans. Don't include utilities, insurance, groceries, or subscriptions — those reduce your discretionary income but aren't 'debt' in this formula.

Front-end vs. back-end DTI

Front-end DTI includes only housing costs (mortgage, property tax, insurance, HOA). Back-end DTI includes ALL debt payments. Lenders typically want front-end DTI below 28% and back-end below 36–43%. This calculator computes both so you see where you stand on each measure.

Frequently asked questions

How do I calculate my debt-to-income ratio?

DTI = Total Monthly Debt Payments ÷ Gross Monthly Income × 100. Example: $2,000 mortgage + $400 car loan + $200 student loan + $150 credit card minimums = $2,750 total debt. Gross income: $7,500/month. DTI = $2,750 ÷ $7,500 = 36.7%.

What is a good debt-to-income ratio?

Under 36%: good, most lenders approve easily. 36–43%: acceptable for qualified mortgages but may get higher rates. 43–50%: only FHA and some non-QM lenders. Above 50%: very difficult to get approved. Ideal for the best rates: under 28% front-end, under 36% back-end.

How can I lower my DTI quickly?

Pay off smallest debts (eliminates a payment line), increase income (side gig, overtime), refinance to extend terms (lower monthly payment, though more total interest), or pay down credit cards (reduce minimum payment). Don't close old credit cards — that doesn't affect DTI (it's about payments, not credit limits).