Debt-to-income (housing) calculator

DTI is the single most important number for mortgage qualifying

Debt-to-income (DTI) is the percentage of your monthly gross income that goes to debt payments. Lenders look at two versions: the front-end DTI (housing costs only) and the back-end DTI (all debt including housing). Most mortgage approval decisions come down to these two ratios, period.

Credit score matters, assets matter, job history matters — but DTI is the gate. You can have an 800 credit score and a 50% down payment and still get denied if your DTI is too high. Understanding DTI precisely is the difference between a smooth approval and a painful denial.

Front-end vs. back-end DTI

• Front-end DTI (housing ratio):proposed PITI (principal, interest, taxes, insurance) + HOA, divided by gross monthly income. Most conventional lenders want this at 28% or below. FHA allows up to 31%. VA doesn't use a hard front-end cap but looks at it.
• Back-end DTI (total debt ratio): PITI + all other recurring monthly debt (car loans, student loans, credit card minimums, child support, personal loans), divided by gross monthly income. Conventional conforming loans cap at 43–45%. FHA allows up to 50% with strong compensating factors. Jumbo loans often cap at 36%.

Lenders look at whichever ratio is more restrictive. If your front-end is 30% and your back-end is 46%, the back-end is the binding constraint for a conventional loan.

What counts as debt in DTI

This catches a lot of buyers off guard. Lenders pull your credit report and count every recurring minimum payment listed, even if you pay off cards in full each month:

• Car loans and leases. Full monthly payment.
• Student loans. Even if currently in deferment or on income-based repayment (IBR), conventional lenders often count 0.5% of the loan balance or the actual IBR payment, whichever is higher. A $100K student loan in deferment can add $500/month to your DTI.
• Credit card minimums. Even if you pay in full. Pay down balances before applying to reduce the minimum.
• Child support and alimony. Full monthly obligation.
• Personal loans and buy-now-pay-later. Affirm, Klarna, Afterpay, etc. — if it hits your credit, it counts.
• Cosigned loans.If you're on the loan, it counts toward your DTI even if someone else pays.

What does not count:

• Utility bills, internet, streaming services, groceries, gas
• Insurance premiums (auto, health, life) that aren't on credit
• Retirement contributions
• Most medical debt (since a 2023 rule change that removed paid collections from scoring)

What counts as income in DTI

Lenders want income that's stable, documented, and likely to continue:

• W-2 base salary. Current rate, easy.
• Overtime, commission, bonus.Usually averaged over the last 2 years if consistent. If you made $20K in overtime in 2024 and $5K in 2023, they'll use the average ($12.5K).
• Self-employment. Net income from your 2-year tax return average, not gross revenue. If you deducted a home office, mileage, and equipment, those reduce your qualifying income.
• Rental income. 75% of lease rent, minus mortgage interest and expenses on the rental.
• Alimony, child support, SSA, pension. Documentable and expected to continue at least 3 more years.

What does not count:

• One-time bonuses or signing bonuses
• Income you don't have 2-year history on
• Tips or cash income not reported on your tax return
• Gifts or loans from family

How to lower your DTI before applying

1. Pay off a car loan. A $450 car payment on $8K of income is 5.6% of DTI. Paying it off could unlock $75K–$100K in additional mortgage capacity.
2. Pay down credit cards to $0. Credit card minimums fluctuate with balance. A $10K balance might cost you $250/month in DTI math; $0 balance costs you $0.
3. Don't finance a new car while house-shopping. This is the most common disqualifier. A new $600/month car payment can drop your qualifying price by $80K–$120K overnight.
4. Ask for a raise or include bonus history.If you got a raise, lenders use current rate (not 2-year average) if it's documented. Bonus history of 2+ years counts too.
5. Add a co-borrower. Adding a spouse or co-borrower combines both incomes and debts. Works if your co-borrower has strong income/credit and low debt.
6. Put more down. A larger down payment lowers the loan amount and thus the PITI, lowering front-end DTI.

The 28/36 rule vs. what lenders actually do

Personal finance advice often cites "28/36" — 28% front-end, 36% back-end — as a safe target. That's conservativeadvice, not what lenders actually require. Real conforming limits:

• Conventional (Fannie Mae / Freddie Mac): up to 50% back-end with compensating factors, typically 43–45% is routine.
• FHA: 43% back-end standard, up to 50% with compensating factors.
• VA: no hard cap, but 41% is the informal target.
• Jumbo: typically 36% back-end, max 43%.

The "28/36 rule" is closer to what you'll be comfortable with, not what you can qualify for. Lenders will approve you at 45% DTI — whether you should borrow that much is a different question.

Compensating factors that let lenders stretch DTI

When your DTI is above the sweet spot, lenders can still approve with "compensating factors":

• Large down payment (20%+ reduces risk)
• Significant cash reserves after closing (3+ months of PITI)
• Long job tenure at same employer (5+ years)
• Credit score 740+
• Non-taxable income (add gross-up of 20–25%)
• Low housing cost increase (current rent ≈ proposed PITI)

Related calculators

To calculate the PITI input to this calculator, use our mortgage payment calculator. For maximum home price based on DTI limits, work backward from your acceptable monthly payment.