Debt-to-Income (DTI) Ratio Calculator
Work out your front-end and back-end DTI ratio and see how it compares to typical mortgage lending thresholds.
Income & Housing Costs
Typical Mortgage Lender DTI Thresholds
| Back-End DTI | What It Usually Means |
|---|---|
| 20% or below | Excellent - strong borrowing capacity |
| 21% - 36% | Good - considered healthy by most lenders |
| 37% - 43% | Manageable - may limit loan options or rates |
| 44% - 50% | High - approval becomes harder, higher rates likely |
| Above 50% | Very high - most mainstream lenders will decline |
Ways to Lower Your DTI
- Pay down high-interest credit card balances first.
- Avoid taking on new loans before a mortgage application.
- Increase income through overtime, a side income, or a pay rise.
- Refinance or consolidate loans to reduce monthly payments.
- Pay off a car loan or personal loan early if you have savings.
Frequently Asked Questions
Your debt-to-income ratio is the percentage of your gross monthly income that goes toward paying debts, including housing costs, loans, and credit card minimum payments. Lenders use it, alongside credit score and affordability checks, to assess how much more debt you can reasonably take on.
Front-end DTI (also called the housing ratio) only counts housing costs - rent or mortgage payment, plus property tax, home insurance and any service charge - divided by gross income. Back-end DTI counts all monthly debt payments, including housing, car loans, student loans, and credit cards, divided by gross income.
Generally, a back-end DTI of 36% or below is considered healthy, 37-43% is manageable but may limit borrowing options, and above 43% is considered high risk by most mortgage lenders. Many conventional mortgage lenders cap back-end DTI at around 43-45%, though some government-backed loans allow up to 50% with compensating factors.
No. DTI is not a factor in your credit score calculation and does not appear on your credit report. However, lenders check it separately during mortgage or loan applications alongside your credit score to judge affordability.
You can lower your DTI by paying down existing debts (especially high-interest credit cards), avoiding new debt before a mortgage application, increasing your income, or refinancing loans to reduce monthly payments. Even small reductions in monthly debt obligations can meaningfully improve your ratio.