Debt-to-Income (DTI) Calculator
Calculate your Debt-to-Income (DTI) ratio, which is a key metric lenders use to determine your mortgage eligibility and borrowing limits.
Calculation Results
The percentage of your pre-tax income that goes to pay monthly debts.
General category of how mortgage underwriters view your DTI ratio.
How This Calculator Works
To determine your DTI ratio:
- Enter your total gross monthly income (before taxes are deducted).
- Enter your total recurring monthly debt payments (include credit card minimums, car payments, student loans, and your expected new mortgage payment).
The calculator returns your exact DTI ratio percentage and provides your standard lending qualification status.
Formula & Calculations
The Debt-to-Income (DTI) ratio is calculated by dividing your total recurring monthly debt obligations by your gross (pre-tax) monthly income, expressed as a percentage:
DTI Ratio = (Total Monthly Debt Payments / Gross Monthly Income) × 100
Lenders break down DTI qualification into the following brackets:
- Excellent (Under 36%): Preferred range for conventional lenders; provides maximum borrowing options and best terms.
- Good (36% to 43%): Qualifies for most conventional mortgages; standard limits.
- Fair (43% to 50%): Higher risk; may require government-backed programs (FHA/VA) or strong compensating factors.
- High (Over 50%): Exceeds typical lending limits; indicates potential financial strain.
Step-by-Step Calculation Examples
Typical Homeowner DTI
A household earning $6,000 gross monthly income with $2,000 in monthly debt obligations.
- monthly_income: 6000
- monthly_debts: 2000
- dti: 33.33%
- qualification: Excellent (Below 36%)
Frequently Asked Questions
What is a gross monthly income?
Gross monthly income is the total amount of money you earn each month before taxes, health insurance premiums, or any other payroll deductions are taken out.
What monthly debts should be included in DTI?
Include recurring debt payments: credit card minimum payments, auto loans, student loans, personal loans, child support/alimony, and housing costs (mortgage principal, interest, taxes, insurance). Do not include living expenses like groceries, utilities, gasoline, cell phone bills, or subscription services.
What is the maximum DTI to qualify for a mortgage?
For conventional loans, the standard maximum DTI is 43%, though some lenders go up to 45% or 50% with high credit scores or significant cash reserves. FHA loans regularly permit DTI ratios up to 50%, and VA loans can occasionally allow higher ratios.