How to use this calculator
The calculator updates as you type. Use monthly amounts throughout.
- Gross monthly income: your pay before tax, retirement contributions and other deductions. If you’re applying for a loan with someone else, add both incomes.
- Rent or mortgage payment: what you pay for housing each month. If you own, include property tax, homeowners insurance and any HOA dues, because lenders include them.
- Car loan, student loan and other payments: the required monthly payment on each, not the balance.
- Credit card minimum payments: the minimum shown on each statement, even if you usually pay more.
- Target back-end ratio: the ratio you want to reach. It starts at 36%, Fannie Mae’s standard maximum for manually underwritten mortgages.
The results show your back-end DTI (all debts) and front-end DTI (housing only), where you sit against published lender limits, and, if you’re above your target, how much debt to cut or how much more income you’d need.
Example: $6,000 a month with four debts
Say you earn $6,000 a month before tax and pay:
| Payment | Monthly amount |
|---|---|
| Rent | $1,500 |
| Car loan | $400 |
| Student loan | $250 |
| Credit card minimums | $150 |
| Total | $2,300 |
Your back-end DTI is $2,300 ÷ $6,000 = 38.33%, and your front-end DTI is $1,500 ÷ $6,000 = 25%.
At 38.33%, you’re above the 36% target but within the 45% limit Fannie Mae allows for manually underwritten loans when the borrower meets its credit score and reserve requirements. To get down to 36%, you’d need to cut $140 a month from your debt payments, or earn $6,388.89 a month with the same debts.
Here’s the useful part: if you paid off the car loan, its whole $400 payment would disappear and your DTI would fall to 31.67%. Clearing one small debt often does more than paying extra across all of them, because only the monthly payment counts, not the balance.
How it’s calculated
Back-end DTI = all monthly debt payments ÷ gross monthly income
Front-end DTI = monthly housing payment ÷ gross monthly income
To show the gap to your target:
- Debt to cut = your monthly debt payments − (target ratio × gross monthly income)
- Income needed = your monthly debt payments ÷ target ratio
For example, at a 36% target and $6,000 income, debts can total $2,160. With $2,300 of payments, that leaves $140 to cut.
The lender limits shown come from Fannie Mae’s Selling Guide. The Consumer Financial Protection Bureau points out that different loan products and lenders use different limits, so treat these as reference points rather than a guarantee of approval.
Tips to lower your DTI
- Pay off the smallest loan first if you’re close to a limit. Removing a whole payment moves your ratio fastest.
- Don’t take on new debt before applying for a mortgage. A new car loan or store card adds a payment that counts straight away.
- Check your credit card minimums. Paying down a card’s balance usually lowers its minimum payment, which lowers your DTI.
- Include all regular income you can document. Lenders usually count steady income such as overtime, bonuses or a second job if it has a track record, so ask what they’ll accept.
- Look at both ratios. Even with a low back-end ratio, a high housing payment can be a problem. Try different rent or mortgage amounts in the calculator before you commit.
Frequently asked questions
What is a good debt-to-income ratio?
Lower is better, and there is no single official cut-off. Fannie Mae's standard maximum for manually underwritten mortgages is 36%, which can go up to 45% for borrowers who meet its credit score and cash reserve requirements, and 50% for loans approved through its automated system. Other lenders and loan types set their own limits.
What is the difference between front-end and back-end DTI?
Front-end DTI counts only your housing payment (rent, or mortgage plus property tax, insurance and HOA dues). Back-end DTI counts all your monthly debt payments, including housing. When lenders talk about "your DTI", they usually mean the back-end ratio.
Is DTI based on gross or take-home pay?
Gross pay. DTI divides your monthly debt payments by your income before tax and other deductions, so it looks lower than the share of your take-home pay that goes to debt.
What payments count towards DTI?
Rent or your mortgage payment, car loans, student loans, minimum credit card payments, personal loans and court-ordered payments such as child support. Everyday bills like utilities, groceries, phone plans and car insurance are not debts, so leave them out.
How can I lower my DTI quickly?
Paying off a small loan removes its whole payment from the calculation, which usually moves the ratio more than spreading the same money across several debts. Adding a co-borrower's income also lowers the ratio, but their debts count too.
What is the maximum DTI for a mortgage?
For loans sold to Fannie Mae, the published maximums are 36% or 45% for manually underwritten loans and 50% for loans approved through its automated system. FHA, VA and other loan programs have their own rules, and individual lenders can be stricter.