Debt-to-Income (DTI) Ratio Calculator

Lenders calculate two debt ratios from the same pay information, and the difference between them is what your existing obligations cost you in borrowing capacity.

• Front-end (housing ratio) - only housing costs: principal, interest, taxes, insurance and any association fees, divided by gross monthly income.
• Back-end (total debt ratio) - housing costs plus every other recurring obligation: car loans, student loans, credit card minimums, personal loans, child support and alimony.
• Rent counts when you are applying for a mortgage - it is a housing obligation even though it is not yet a mortgage payment.
• Installment debt only. Revolving minimums are usually counted at the minimum due, not the balance, though lenders may use a percentage of the limit instead.

These are guidelines, not laws. Automated underwriting systems weigh credit score, reserves, down payment and income stability alongside the ratios, so a strong file can be approved above the stated limit and a weaker one rejected below it.

Note. The qualifying limit is a ceiling, not a recommendation. A borrower at the maximum ratio has no margin for a rate rise, a repair, or a period of reduced income. A practical personal target is well below any lender ceiling.

A high income with high obligations can produce a worse ratio than a moderate income with none. Lenders are measuring the margin left after your existing commitments, not your earnings.

Identical income, identical housing cost, and materially different outcomes - driven entirely by the car payment, the student loan and the card balances.

1. Pay down revolving balances. Credit card minimums count against you every month; reducing the balance reduces the required payment.
2. Do not take on new debt before applying. A car finance taken in the months before a mortgage application can remove tens of thousands of borrowing capacity.
3. Finish existing instalment loans where the remaining balance is small - the whole payment drops out of the calculation.
4. Wait after any large change. Lenders usually want to see a stable pattern rather than a single good month.
5. Raise income with documentation. Overtime, bonus and self-employment income only count if it can be evidenced over time.
6. Include all obligations honestly. Omitting a debt does not remove it; it surfaces later and delays or derails the application.

You do not need a lender to use this calculation, and for personal planning the stricter version is the useful one.

• Count everything - rent, loans, card minimums, subscriptions financed over time, and support payments.
• Use after-tax income for your own budget even though lenders use gross. The lender's ratio is a permission, not a plan.
• Track it over time. A ratio that is drifting upward is an early signal before it becomes a problem.
• Test a change. Run the ratio after a car purchase or a move to see what it does to your remaining capacity before committing.