How to calculate your debt-to-income ratio
- Add up the monthly payments on everything you owe: rent or mortgage, car loans, student loans, credit card minimums, personal loans, and court-ordered support.
- Divide by your gross monthly income, which is your pay before taxes and other deductions.
- Multiply by 100 to get a percentage.
For example, with $6,000 a month of gross income, a $1,500 rent payment, a $350 car payment, a $200 student loan payment, and $150 of credit card minimums, debts total $2,200 a month. $2,200 ÷ $6,000 = 36.7%. The housing payment alone is $1,500 ÷ $6,000 = 25.0%, which lenders call the front-end or housing ratio. The total is the back-end ratio, and it's the one most limits refer to.
What's a good debt-to-income ratio?
There's no single cutoff; each loan program and lender sets its own. For conventional mortgages sold to Fannie Mae, the Selling Guide sets these maximums on the total ratio:
- 36% for a loan underwritten by hand.
- 45% for a hand-underwritten loan if the borrower meets the credit score and cash reserve requirements.
- 50% for a loan approved through Fannie Mae's automated system, Desktop Underwriter.
Being under a maximum doesn't guarantee approval: lenders also look at credit history, savings, and the loan itself. And a ratio a lender will accept can still be a tight budget. If over a third of your gross pay goes to debt, taxes and living costs leave little room for savings.
How to lower your DTI
- Pay off a small balance with a high payment. Removing a whole payment lowers DTI more than paying down part of a big loan. The "if you paid one debt off" table above shows the effect of each.
- Pay down credit cards. Card minimums shrink as the balance does, so paying them down lowers DTI even before they're gone.
- Don't take on new payments before a mortgage application, such as a car loan or a store card.
- Count all your income. If you have steady income you can document, such as a second job or self-employment income, ask the lender how they count it.
FAQ
Is DTI based on gross or take-home pay?
Gross: income before taxes and other deductions, as defined by the Consumer Financial Protection Bureau. That's why a DTI that looks fine can still feel tight in your budget.
Do utilities, phone bills, or subscriptions count?
No. DTI counts debts and debt-like obligations such as loans, leases, credit card minimums, and court-ordered support. Living expenses aren't included.
What if a loan has only a few payments left?
Fannie Mae's guide leaves out installment loans with ten or fewer monthly payments remaining unless they significantly affect your ability to pay. Leases count no matter how many months are left.
My credit report shows no payment on a card or a deferred student loan. What do lenders use?
Under Fannie Mae's rules, 5% of a card's balance if no minimum payment is reported, and for a deferred or forborne student loan, 1% of the balance or a payment based on the loan's documented terms.
Does this calculator store my data?
No. Everything is calculated in your browser, and nothing you type is sent anywhere.
Sources
- Definition (monthly debt payments divided by gross monthly income): CFPB: What is a debt-to-income ratio?
- 36% / 45% / 50% maximums: Fannie Mae Selling Guide B3-6-02, Debt-to-Income Ratios.
- Which debts count, the ten-payment rule, the 5% card rule, and the 1% student loan rule: Fannie Mae Selling Guide B3-6-05, Monthly Debt Obligations.
Last checked November 6, 2026. For education and planning only. FHA, VA, USDA, and other lenders have their own limits.
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