How to use the DTI calculator
Choose whether you know your gross income per month or per year and enter it. Gross income is your pay before taxes and other deductions; include everyone who will be on the loan application.
Then enter your monthly debt payments. Put your rent or mortgage payment in the housing field, including property tax, home insurance and HOA fees if you pay them. Add the monthly payments on your car loan, student loans, the minimum payments on your credit cards and any other debts. Use Add debt for extra loans you want to list separately. Empty fields count as zero.
Press Calculate to see both ratios, a rating and, in the details, a table of your debts and the monthly totals that match a 36% and a 43% ratio.
The two ratios
- Front-end DTI = housing payment ÷ gross monthly income × 100. It shows how much of your income goes to the home alone. Many mortgage guidelines prefer 28% or less.
- Back-end DTI = all monthly debt payments ÷ gross monthly income × 100. This is the figure most people mean by "DTI", and the rating is based on it.
The rating bands used here are 36% or less good, 37% to 43% manageable, 44% to 49% high, and 50% or more very high. Lenders and loan programs set their own limits, so a ratio in the manageable band can still be approved by one lender and declined by another.
Worked example
Your gross monthly income is 6,000. You pay 1,500 for housing, 400 for a car loan, 250 for a student loan and 150 in credit card minimums, 2,300 in total.
- Front-end DTI: 1,500 ÷ 6,000 = 25%.
- Back-end DTI: 2,300 ÷ 6,000 = 38.33%, which falls in the manageable band.
- At 36%, your total payments could be 6,000 × 0.36 = 2,160, so you would need to cut 140 a month.
- At 43%, the limit is 2,580, which leaves 280 of room.
Good to know
- Only count regular required payments. Utilities, groceries, phone bills and insurance other than home insurance are usually not part of DTI.
- Lowering your DTI works both ways: paying off a loan removes its payment, and a higher gross income lowers every ratio.
- Results are estimates for planning. A lender will use its own rules, may count income differently and will look at other factors such as your credit history.