How to use the debt-to-income ratio calculator
- Enter your gross income, which is income before taxes and deductions, and choose whether the amount is per month or per year. Add other income if a lender would count it.
- Enter your monthly housing payment: rent, or mortgage principal, interest, property tax, insurance and HOA dues.
- List your other monthly debt payments, such as car loans, student loans and the minimum payment on each credit card. Use the Add a debt button for more.
- Read the back-end ratio (all debts), the front-end ratio (housing only) and the table of room left at common reference levels.
Formula
Gross monthly income = income (divided by 12 if entered per year) + other income
Front-end DTI = monthly housing payment / gross monthly income
Back-end DTI = (housing payment + other monthly debt payments) / gross monthly income
Room at a level = gross monthly income x level - current payments
Debt-to-income uses payments, not balances, and gross income, not take-home pay. Everyday costs such as groceries, utilities and insurance premiums are normally left out unless they are part of the housing payment.
Worked example: $6,500 of monthly income
A household earns $6,500 a month before taxes. Housing costs $1,800. Other debts are a $450 car loan, a $300 student loan and $120 of credit card minimums, which total $870.
The front-end ratio is 1,800 / 6,500 = 27.69%. Total debt payments are $2,670, so the back-end ratio is 2,670 / 6,500 = 41.08%. The same income entered as $78,000 a year gives the identical result.
Against the reference levels, 28% of income for housing is $1,820, which leaves $20 of room. For all debts, 36% is $2,340 (over by $330), 43% is $2,795 ($125 of room) and 50% is $3,250 ($580 of room).
Front-end and back-end ratios
The front-end ratio looks only at housing. The back-end ratio adds every recurring debt payment. Lenders mostly focus on the back-end figure because it shows how much of your income is already committed. Both use gross income. The Consumer Financial Protection Bureau describes DTI as total monthly debt payments divided by gross monthly income and notes that limits vary by loan type and lender.
Rules of thumb, not requirements
You will often see 28% for housing and 36% for all debt (the "28/36 rule"), and 43% is another figure often quoted in mortgage discussions. These are widely repeated reference points, not rules every lender follows. Some loan programs allow higher ratios with other strengths such as savings or a large down payment, and some lenders set lower limits. The table on the results shows how much monthly debt each level would allow for your income, so you can see where you stand without treating any one number as a pass or fail line.
What lenders may count differently
Lenders can include or exclude items in ways this calculator cannot know. For example, a student loan in deferment might still be counted at an assumed payment, installment loans with only a few payments left might be ignored, and variable income may be averaged over two years. Child support and alimony are often counted as debts. Enter your real payments, then ask the lender how it calculates the ratio.
If your ratio is higher than you would like, the debt payoff calculator can show how fast paying down balances lowers your payments, and the mortgage calculator can show how a new payment would change the front-end ratio.
Assumptions and limits
- Income is gross, before taxes. Other income is added only if you enter it.
- Every amount is a monthly payment. Balances do not matter for DTI.
- The 28%, 36%, 43% and 50% figures are commonly quoted reference points and are not required by every lender. Your lender sets its own limits.
- Which debts a lender counts, how it treats deferred loans, self-employment income and rental income, and other approval factors such as credit score are not modeled.
- The housing payment is whatever you enter. Taxes, insurance and HOA dues should be included if they are part of your payment.
- This is an estimate, not financial advice or a credit decision.
Frequently asked questions
How do I calculate debt-to-income ratio?
Add your monthly debt payments, including housing, and divide the total by your gross monthly income. With $2,670 of payments on $6,500 of income, the ratio is 41.08%. Multiply by 100 to show it as a percent.
What is the difference between front-end and back-end DTI?
Front-end counts only the housing payment, 27.69% in the example. Back-end adds car loans, student loans and card minimums, 41.08% in the example. The back-end figure is the one most lenders weigh more heavily.
Does rent count in debt-to-income?
It counts as the housing payment when you rent and are checking your own ratio. A lender evaluating a mortgage uses the proposed new housing payment instead of your rent, so enter the payment you expect to have.
Do utilities and groceries count?
No. DTI includes recurring debt obligations and the housing payment, not everyday living costs such as food, utilities, phone service or insurance premiums that are not part of your housing payment.
What DTI do I need to get approved?
There is no single number. Limits differ by lender, loan type and the rest of your application. Use the reference table to see your room at several common levels, then ask the lender what its limit is for the product you want.