What is a good debt-to-income ratio?

Most lenders prefer a DTI below 36%. Under 28% is considered excellent. Between 36-43% is borderline and may require compensating factors. Above 43% makes it difficult to qualify for most conventional mortgages.

What debts are included in DTI?

Lenders count all recurring monthly debt obligations: mortgage or rent, car payments, student loan minimum payments, credit card minimum payments, personal loan payments, child support, and alimony. They do not include utilities, groceries, or irregular expenses.

Does DTI affect my credit score?

DTI itself is not part of your credit score calculation, but high credit card balances (which contribute to a high DTI) do affect your credit utilization ratio, which is a major credit score factor.

Debt-to-Income Ratio Calculator

Debt Ratio Inputs

Measure debt pressure against gross monthly income.

Income

Gross Monthly Income

Monthly Debt Payments

Mortgage / Rent

Car Payment

Student Loans

Credit Card Min.

Personal Loan

Other Debt

Borrowing Health

Debt-to-Income Ratio

Good

DTI Ratio

26.0%

Good

Debt level is in a healthy range.

Income Allocation

Monthly Debt$1,800.00

Remaining Income$5,200.00

Target: keep DTI under 36%. Upper warning zone starts around 43%.

Monthly Income

$7,000.00

Gross income

Total Debts

$1,800.00

Monthly payments

Remaining Income

$5,200.00

After debts

DTI Target Gap

$0.00

Within 36% target

Debt Breakdown

Borrowing Score

/100

Grade: B+

Risk Level: Low

Your debt profile is clean. Do not ruin it by adding unnecessary monthly payments.

Smart Recommendations

✓Your DTI is 26.0%, which is strong for most borrowing decisions.

✓You have about $720.00 monthly room before reaching a 36% DTI target.

✓Remaining monthly income after debt payments is $5,200.00.

✓At a 43% upper limit, estimated extra monthly debt capacity is $1,210.00.

Excellent

≤20%

Good

21–28%

Fair

29–36%

Borderline

37–43%

Poor

44–50%

Danger

>50%

DTI is a screening metric. Lenders may also consider credit score, reserves, employment history, assets, and loan type.

Your debt-to-income (DTI) ratio is the single most important number lenders look at when you apply for a mortgage, car loan, or any major credit. This calculator adds up all your monthly debt payments, divides by your gross monthly income, and tells you where you stand relative to lender thresholds — instantly.

How DTI Is Calculated

DTI is simply total monthly debt payments divided by gross monthly income, expressed as a percentage. A $500 car payment, $300 student loan, and $1,800 mortgage on a $7,000/month income gives a DTI of 37.1% ($2,600 ÷ $7,000). The debts that count are fixed, recurring obligations — not discretionary spending.

The 28/36 and 43% Benchmarks

Conventional mortgage lenders typically require a back-end DTI (all debts) under 43%, though 36% or below is preferred. The 28% front-end limit specifically covers just housing costs. FHA loans allow up to 43%, VA and USDA loans can go higher with compensating factors. The exact limit depends on loan type, lender, and your credit profile.

What Counts as Debt in DTI

Lenders include: mortgage or rent, car payments, student loan minimums, credit card minimums, personal loan payments, child support, and alimony. They don't count utilities, phone bills, groceries, or subscriptions — even though those affect your real budget. This is why DTI approval doesn't automatically mean the payment is comfortable in practice.

How to Lower Your DTI

Two levers: reduce monthly debt obligations (pay off revolving debt, refinance at lower payments, pay off a car loan) or increase income. Paying off a credit card with a $150 minimum drops your DTI by $150 ÷ monthly income. If you're borderline, paying off a small debt before applying for a mortgage can push your DTI into the qualifying range. Use our house affordability calculator to see how DTI changes affect your maximum home price.