Debt-to-income ratio is the number that decides your mortgage more than almost anything else — often more than your credit score. It's also one of the few you can genuinely move before you apply. Here's what lenders look for and how to work out where you stand.
What DTI actually measures
Your DTI is your total monthly debt payments divided by your gross monthly income. If you earn $6,000 a month before tax and your debts come to $2,100, your DTI is 35%.
Lenders use it to answer one question: if we hand you this mortgage, is there enough left over each month to actually pay it? It's a blunt instrument, but it predicts default well, which is why it carries so much weight.
Doesn't count: utilities, groceries, phone bills, insurance that isn't property-related, and subscriptions. Lenders look at debt obligations, not your lifestyle.
The two ratios: front-end and back-end
Lenders actually calculate two numbers, and the 28/36 rule is the shorthand for both:
| Ratio | What it covers | Common target |
|---|---|---|
| Front-end | Housing costs only | ≤ 28% of gross income |
| Back-end | All monthly debt including housing | ≤ 36% of gross income |
When people say "DTI" without qualifying it, they almost always mean the back-end ratio — that's the one that makes or breaks the application. Our DTI calculator works out both from your income and debts.
The thresholds that matter
| Your DTI | What it means |
|---|---|
| Under 36% | Comfortable. Full range of loans and best pricing. |
| 36–43% | Workable. Most lenders will still lend, though terms may tighten. |
| 43–50% | Difficult. Options narrow to FHA and portfolio lenders, and you'll need compensating factors. |
| Over 50% | Very hard. Most conventional doors close. |
The 43% line matters because it's the standard ceiling for a Qualified Mortgage — the category most conventional lenders stick to. Above it, you're not out of options, but you've left the well-lit part of the market.
Where FHA is different
FHA loans exist partly to serve borrowers whose numbers don't fit the conventional box. They're more forgiving on DTI, and can go meaningfully above 43% when you bring compensating factors — significant cash reserves, a larger down payment, a long stable job history, or a credit score well above the minimum.
The trade-off is mortgage insurance. FHA charges an upfront premium of 1.75% of the loan (usually financed into it) plus an annual premium every month — and with less than 10% down on a 30-year loan, that annual premium lasts the life of the loan rather than dropping off at 20% equity. Our FHA loan calculator includes both so you see the real payment, not the one without insurance.
How to lower your DTI before applying
Pay off small balances entirely. This is the highest-leverage move and it's counterintuitive. DTI counts the monthly payment, not the balance. Clearing a $2,000 car loan with a $400 payment drops your DTI far more than paying $2,000 off a mortgage. Kill the small debts with big payments first.
Don't take on anything new. Financing a car three months before a mortgage application is a classic own goal — a $500 car payment can cost you tens of thousands in borrowing power.
Increase your down payment. A bigger deposit shrinks the loan, which shrinks the payment, which lowers the front-end ratio.
Document all your income. Bonuses, overtime, and side income often count if you can show a consistent two-year history. Plenty of people have a better DTI than their paperwork shows.
Check where you land with the DTI calculator, then use the mortgage calculator to work backward to a price that fits.
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Frequently Asked Questions
What is a good debt-to-income ratio for a mortgage?
Under 36% is comfortable and 43% is the common ceiling for a Qualified Mortgage. Below 36% gives you the widest choice of lenders and the best pricing.
What is the 28/36 rule?
Keep housing costs under 28% of gross monthly income (the front-end ratio) and total debt under 36% (the back-end ratio). Most lenders weigh the back-end ratio most heavily.
Can I get a mortgage with a DTI over 43%?
Sometimes. FHA and portfolio lenders can go higher with compensating factors like large cash reserves, a bigger down payment, or a strong credit score, but conventional options narrow sharply.
What is the fastest way to lower my DTI?
Pay off small debts that carry large monthly payments. DTI counts the payment rather than the balance, so clearing a small car loan helps far more than paying down a large mortgage.