How it works
Debt-to-income ratio = total monthly debt payments ÷ gross monthly income
Lenders look at two versions. The front-end ratio counts only housing: rent, or the mortgage payment with property tax, insurance and HOA fees. The back-end ratio adds every other debt payment, such as car and student loans and card minimums. When people say "DTI", they usually mean back-end.
What your ratio means
| Back-end DTI | What lenders tend to think |
|---|---|
| 36% or less | The CFPB suggests keeping total debt payments here. Most lenders see this as healthy. |
| 37% to 43% | Many lenders still approve, often with stricter terms. 43% was the long-standing limit for qualified mortgages, and FHA’s standard limit. |
| 44% to 50% | Some loan programs allow it with strong credit or savings, but it leaves little room in your budget. |
| Over 50% | Most lenders will decline. More than half of your gross income already goes to debt. |
Worked example
You earn $6,000 a month before tax. Rent is $1,500, and a car loan, student loan and card minimums add $800. Your front-end ratio is 25.0% and your back-end ratio is 38.3%, a little above the 36% the CFPB suggests. Paying off the card balances would bring it to 35.8%.
How to lower your DTI
- Pay off a small debt completely. Clearing one payment helps your DTI more than paying a little off every debt.
- Avoid new debt before applying for a mortgage or loan.
- Raise your income, or add a co-borrower whose income counts.
- Plan your payoff with the debt payoff calculator, or see how DTI limits set your home budget in the home affordability calculator.
Questions people ask
Which debts count toward DTI?
Regular monthly payments you owe: housing, car and student loans, minimum card payments, personal loans, and obligations like child support. Utilities, groceries, phone plans and insurance premiums (other than on the home) usually don't count.
Does DTI affect my credit score?
No. Your income isn't in your credit report, so DTI isn't part of your score, but lenders use it alongside your score to decide.
Sources
- Consumer Financial Protection Bureau: what is a debt-to-income ratio?
- U.S. Department of Housing and Urban Development: FHA qualifying ratios (31% housing, 43% total)
Reviewed September 28, 2026 by The Dollars World team. How we build and check our calculators · Our data and formulas. This is general information, not financial advice.