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Debt-to-Income (DTI) Calculator
Calculate your debt-to-income ratio to assess your financial health and loan eligibility. Input your monthly debts and income to understand how lenders view your ability to manage monthly payments.
DTI Calculator
Enter your monthly debts and income to calculate your DTI ratio and learn tips for improving your creditworthiness.
Financial Disclaimer
This Debt-to-Income (DTI) calculator is provided for educational and informational purposes only. Results are estimates and should not be considered financial, tax, or lending advice. Your actual DTI evaluation by lenders may differ based on their specific underwriting criteria. Always consult with a qualified financial advisor or mortgage professional before making borrowing or financial planning decisions. myUSFinance does not guarantee loan approval or specific lending outcomes based on the results of this calculator.
Understanding Debt-to-Income Ratio
Your debt-to-income ratio, commonly referred to as DTI, is one of the most important financial metrics that lenders evaluate when you apply for a mortgage, auto loan, personal loan, or credit card. It measures the percentage of your gross monthly income that goes toward paying your recurring monthly debt obligations. A lower DTI signals to lenders that you have a healthy balance between debt and income, making you a less risky borrower.
Front-End vs. Back-End DTI
Lenders typically look at two types of DTI ratios. The front-end DTI (also called the housing ratio) includes only housing-related expenses such as your mortgage payment, property taxes, homeowners insurance, and HOA fees divided by your gross monthly income. The back-end DTI (also called the total debt ratio) includes all of your monthly debt obligations — housing costs plus car payments, student loans, credit card minimum payments, personal loans, child support, and any other recurring debt — divided by your gross monthly income. Most lenders focus primarily on the back-end DTI when evaluating your overall creditworthiness and ability to take on new debt.
Why Lenders Use DTI
Lenders use the debt-to-income ratio as a key risk assessment tool because it provides a clear snapshot of how much of your monthly income is already committed to existing debt payments. A borrower with a high DTI may struggle to manage additional monthly payments, increasing the risk of default. Federal lending guidelines, including those from Fannie Mae and Freddie Mac, set maximum DTI thresholds that borrowers must meet to qualify for conforming loans.
Ideal DTI Ranges
Financial experts generally recommend keeping your total DTI below 36%, with no more than 28% allocated to housing costs. A DTI under 20% is considered excellent and gives you the strongest negotiating position for favorable interest rates. Most conventional mortgage lenders prefer a DTI at or below 43%, which is the maximum for qualified mortgages under the Consumer Financial Protection Bureau (CFPB) guidelines. Some government-backed loan programs, such as FHA loans, may allow DTI ratios up to 50% with compensating factors like a strong credit score or substantial cash reserves.
How to Use This Debt-to-Income Calculator
- Enter your gross monthly income — This is your total income before taxes and deductions. Include your salary, wages, bonuses, freelance income, rental income, alimony received, and any other regular sources of income.
- Add your monthly debt payments — Enter all recurring monthly debt obligations including mortgage or rent payments, car loan payments, student loan payments, credit card minimum payments, personal loan payments, child support, and alimony payments.
- Click "Calculate" — The calculator will divide your total monthly debts by your gross monthly income and display your DTI as a percentage.
- Review your results — Your DTI percentage will appear along with a rating that indicates where you stand relative to common lending thresholds. Use the guidance provided to understand what your DTI means for loan qualification.
- Adjust and plan — Experiment with different income and debt scenarios to see how paying off a loan or increasing your income could improve your DTI before applying for credit.
DTI Formula Explained
The debt-to-income ratio is calculated using a straightforward formula that divides your total recurring monthly debt payments by your gross monthly income, then multiplies by 100 to express the result as a percentage.
Monthly debts: $1,200 mortgage + $350 car payment + $280 student loans + $170 credit cards + $100 personal loan = $2,100 total
Gross monthly income: $6,500
DTI = ($2,100 ÷ $6,500) × 100 = 32.3% DTI
A 32.3% DTI falls within the "good" range and would generally meet qualification requirements for most conventional and government-backed mortgage programs.
DTI Ratio Ranges and What They Mean
The table below summarizes how lenders typically interpret different debt-to-income ratio ranges, along with your likelihood of loan qualification and recommended actions for each tier.
| DTI Range | Rating | Qualification Likelihood | Recommended Action |
|---|---|---|---|
| Under 20% | Excellent | Very high — best rates available | You are in a strong financial position. Maintain your current habits and consider investing surplus income. |
| 20% – 35% | Good | High — qualifies for most loans | You are managing debt well. Focus on keeping debt levels stable and building an emergency fund. |
| 36% – 43% | Fair | Moderate — may face stricter review | Work on reducing debt before applying for new credit. Pay off smaller balances and avoid new obligations. |
| 44% – 50% | Poor | Low — limited options, higher rates | Prioritize aggressive debt repayment. Consider debt consolidation and create a strict monthly budget. |
| Over 50% | High Risk | Very low — unlikely to qualify | Seek financial counseling. Focus entirely on debt elimination before applying for any new credit products. |
5 Strategies to Lower Your Debt-to-Income Ratio
1. Pay Down Existing Debt Aggressively
The most direct way to lower your DTI is to reduce your monthly debt payments. Focus on paying off high-interest debts first using the avalanche method, or tackle smaller balances first with the snowball method for psychological momentum. Every debt you eliminate removes that payment from your DTI calculation entirely.
2. Increase Your Gross Income
Since DTI is a ratio of debt to income, increasing your income lowers the percentage even if your debts stay the same. Consider negotiating a raise, taking on a side job, freelancing, renting out a spare room, or pursuing a higher-paying position. Even a modest income increase can meaningfully improve your DTI.
3. Avoid Taking on New Debt
Before applying for a major loan like a mortgage, avoid opening new credit accounts, financing large purchases, or cosigning for others. Each new debt obligation increases your monthly payments and raises your DTI, potentially disqualifying you from favorable loan terms.
4. Refinance or Consolidate Existing Loans
Refinancing high-interest loans at a lower rate or extending loan terms can reduce your monthly payments. Debt consolidation combines multiple payments into a single lower payment. While this may cost more in total interest over time, it can lower your monthly DTI for qualification purposes.
5. Create and Follow a Strict Budget
A detailed monthly budget helps you identify discretionary spending that could be redirected toward debt repayment. Track every expense, cut unnecessary subscriptions, reduce dining out, and allocate the savings directly to debt paydown. Consistent budgeting accelerates your path to a healthier DTI ratio.
DTI Calculator FAQ
A good debt-to-income ratio is generally considered to be 36% or lower. A DTI under 20% is excellent, indicating strong financial health and giving you access to the best loan rates and terms. Most mortgage lenders prefer applicants with a DTI at or below 43%, which is the qualified mortgage threshold set by the Consumer Financial Protection Bureau. However, even within the acceptable range, a lower DTI will typically result in better interest rates and more favorable loan conditions.
Your debt-to-income ratio does not directly affect your credit score. Credit scoring models like FICO and VantageScore do not use your income as a factor. However, a high DTI often correlates with high credit utilization (the percentage of available credit you are using), which does impact your credit score significantly. Additionally, if a high DTI leads to missed payments or defaults, those negative marks will appear on your credit report and lower your score.
Front-end DTI, also known as the housing ratio, only includes housing-related expenses such as your mortgage payment (principal and interest), property taxes, homeowners insurance, and HOA fees. Back-end DTI includes all monthly debt obligations — housing costs plus auto loans, student loans, credit card minimums, personal loans, child support, and other recurring debts. Lenders evaluate both ratios, but the back-end DTI is typically the primary measure used for loan qualification decisions. The common guideline is a front-end DTI of 28% or less and a back-end DTI of 36% or less.
Your DTI calculation includes all recurring monthly debt payments that appear on your credit report or that a lender would verify. This typically includes mortgage or rent payments, auto loan payments, student loan payments, credit card minimum payments, personal loan payments, child support and alimony obligations, and any other installment loans. Expenses like utilities, groceries, insurance premiums (unless bundled with a mortgage), cell phone bills, and subscription services are generally not included in DTI calculations because they are considered living expenses rather than debt obligations.
DTI requirements vary by loan type. For conventional loans backed by Fannie Mae and Freddie Mac, the maximum DTI is typically 45% to 50% with strong compensating factors, though 43% or below is preferred. FHA loans may accept DTI ratios up to 57% in some cases with automated underwriting approval. VA loans do not have a strict maximum DTI but lenders generally prefer 41% or below. USDA loans typically require a back-end DTI of 41% or less. For the best interest rates and easiest approval process, aim for a DTI below 36%.
To calculate your DTI manually, first add up all of your required monthly debt payments — include your mortgage or rent, car payments, student loans, credit card minimums, personal loans, child support, and any other recurring debt. Next, determine your gross monthly income (before taxes and deductions). Finally, divide your total monthly debts by your gross monthly income and multiply by 100. For example, if your debts total $1,800 per month and your gross income is $5,500, your DTI is ($1,800 / $5,500) x 100 = 32.7%. You can also use our calculator above for instant results.
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Scenario Comparison: Debt-to-Income Ratio Ranges and Their Implications
How lenders interpret your DTI ratio when evaluating loan applications.
| DTI Range | Rating | Mortgage Eligibility | Recommended Action |
|---|---|---|---|
| Under 20% | Excellent | Best rates available | Maintain current habits |
| 20-35% | Good | Qualifies for most loans | Continue reducing debt |
| 36-43% | Acceptable | May qualify with conditions | Prioritize debt payoff |
| 44-49% | High | Difficult to qualify | Aggressive debt reduction needed |
| 50%+ | Very High | Generally denied | Seek credit counseling |
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Real-World Example: Putting the Debt to Income to Work
Let's compare debt repayment strategies with a real scenario.
Scenario: Jason has three debts and can allocate $800 per month total toward repayment:
- Credit Card A: $4,500 balance at 22.99% APR (minimum payment: $135)
- Credit Card B: $2,200 balance at 18.49% APR (minimum payment: $66)
- Personal Loan: $8,000 balance at 9.5% APR (minimum payment: $267)
Avalanche Method (highest rate first): Pay minimums on all debts, put extra $332 toward Credit Card A first. Debt-free in 26 months, total interest paid: $2,847.
Snowball Method (smallest balance first): Pay minimums on all debts, put extra $332 toward Credit Card B first. Debt-free in 27 months, total interest paid: $3,104.
The avalanche method saves Jason $257 in interest and one month. However, the snowball method eliminates his first debt in just 5 months, providing a motivational boost. Both methods are vastly superior to paying only minimums, which would take 94 months and cost $6,218 in interest.