Debt-to-Income (DTI) ratio is the percentage of your gross monthly income that goes toward monthly debt payments. Lenders use DTI to assess your ability to take on new debt, especially a mortgage. A lower DTI signals more financial flexibility; a higher DTI signals greater strain.

What is the 28/36 rule?

The 28/36 rule is a classic mortgage qualification guideline: housing costs (P&I + property tax + insurance + HOA) should stay at or below 28% of gross monthly income, and total monthly debt should stay at or below 36%. Meeting both thresholds puts you in the most favorable borrowing position. Lenders are more lenient with FHA loans (often 31/43), and stricter with jumbo loans (often capping at 38–40% back-end).

What counts as monthly debt for DTI?

All monthly debt obligations: housing payment (P&I + property tax + insurance + HOA), credit card minimum payments, auto loans and leases, student loan payments, personal loan payments, child support, alimony, and any other debt with a monthly obligation. Items that do NOT count: utilities, groceries, insurance premiums paid annually, phone bills, and subscriptions (these are expenses, not debt service).

What is the difference between front-end and back-end DTI?

Front-end DTI is just the housing payment divided by gross monthly income. Back-end DTI is all monthly debt (including housing) divided by gross monthly income. Lenders care most about back-end DTI because it captures your full debt burden. The 28% front-end limit is a soft target; the 36% back-end limit is a hard rule of thumb for conventional loans.

What DTI is needed to qualify for a mortgage?

Most conventional loans require a back-end DTI of 36% or lower, with some lenders going to 43% or 45% with compensating factors (excellent credit, large down payment, significant reserves). FHA loans are typically capped at 50% back-end but most lenders want 43% or less. VA loans have no formal DTI cap but lenders usually want 41% or less. Jumbo loans usually cap at 38–40% back-end.

How can I lower my DTI?

Two paths: increase income, or reduce monthly debt. To reduce debt, pay down credit cards first (they're the most expensive), then consider refinancing student loans for a lower payment, downsizing your home, or selling a financed car. To increase income, ask for a raise, take on a side job, or document non-wage income (rental, dividends) that lenders will count. A combination of both is the fastest path to qualification.

Does gross monthly income include overtime and bonuses?

For mortgage qualification, lenders typically average your last two years of W-2 income including base, overtime, and bonuses. Self-employed borrowers use net income from tax returns plus add-backs (depreciation, certain business expenses). Rental income is usually counted at 75% (the remaining 25% is a vacancy/maintenance reserve). Social Security and pension income also count if documented and likely to continue.

Do utilities, groceries, and insurance count toward DTI?

No. DTI specifically measures debt service — payments on borrowed money that you are contractually obligated to make. Utilities, groceries, insurance premiums, phone bills, transportation, and child care are expenses, not debt. The 36% rule is a debt-service ratio, not a budget ratio; a separate 'housing + utilities' calculation (the 50/30/20 rule or similar) is a complementary budget framework.

DTI Calculator

A DTI calculator is a free online tool that calculates your debt-to-income ratio against the 28/36 mortgage qualification rule. It shows front-end and back-end ratios, debt mix, and recommended maximum housing costs. Free, no sign-up required.

Income & Debt Details

Gross Monthly Income?Enter your gross monthly income.

Housing (PITI + HOA)?Enter your housing (piti + hoa).

Credit Card Minimums?Enter your credit card minimums.

Auto Loan / Lease?Enter your auto loan / lease.

Student Loans?Enter your student loans.

Other Debt

End of inputs

Your DTI Summary

DTI Ratios

Front-End DTI

21.43%

Housing / income (28% rule)

Back-End DTI

32.86%

Total debt / income (36% rule)

28/36 Rule

Meets

Both ratios at or below limits

Recommended Maxima (Under 28/36 Rule)

Max Housing

$1,960.00

28% of gross monthly income

Max Total Debt

$2,520.00

36% of gross monthly income

Back-End Headroom

$220.00

Under 36% rule

Current Obligations

Total Monthly Debt

$2,300.00

Sum of all categories

Gross Monthly Income

$7,000.00

Pre-tax

Front-End Headroom

$460.00

Under 28% rule

Income: $7,000.00. Total debt: $2,300.00 (32.86% of income). Housing: $1,500.00 (21.43% of income). 28/36 rule: Met.

Debt Mix Breakdown

Actual vs. Recommended (28/36 Rule)

Key Insights

You meet the classic 28/36 rule: housing is at or below 28% of income and total debt is at or below 36%. This is the gold standard for mortgage qualification and gives you the most lender options.

You have only $220.00 of headroom under the 36% back-end threshold — a single car loan or credit card balance would push you over. Hold off on new debt until you build more cushion.

Your back-end DTI of 32.86% is in the healthy zone — below the 36% rule of thumb. Most lenders will view you as a strong borrower.

Your front-end DTI of 21.43% is at or below the 28% guideline — a strong signal that housing is comfortably affordable on your income.

Your debt is well-distributed across categories — no single type dominates. This gives you flexibility to attack the highest-rate debt first without upending your budget.

Guide

How to Use This Calculator

1Enter your gross monthly income (before taxes and deductions). Use your base salary; bonuses and overtime are typically averaged across the past two years for mortgage qualification.
2Set your total monthly housing payment — this is principal + interest + property tax + homeowner's insurance + HOA fees + PMI (if any). Don't include utilities.
3Enter the minimum monthly payment on all credit card balances. Use the statement minimum, not the full balance, since DTI counts the minimum contractual payment.
4Add the monthly payment for each auto loan or lease. Both count toward DTI; lenders treat leases and loans identically.
5Enter the monthly payment for all student loans — federal and private. Income-driven repayment plans that lower the payment are valid; lenders use the actual payment on your credit report.
6Add any other monthly debt (personal loans, child support, alimony, debt consolidation loans). Don't include utilities, groceries, or insurance premiums — those are expenses, not debt.
7Review the front-end DTI (housing / income) and back-end DTI (total / income). Compare against the 28/36 rule to see whether you qualify for a conventional mortgage at favorable terms.
8Examine the recommended maxima to see how much housing and total debt you can carry under the rule, and the headroom you have left.
9Look at the pie chart to see your debt mix — concentrated housing is normal, but credit-card-heavy DTI is the most expensive to maintain.
10Read the AI-powered insights for tier-specific guidance on whether your DTI is healthy, in caution territory, or in the high zone.

Formula

How It's Calculated

The DTI calculator computes two ratios and a category breakdown:

FRONT-END DTI (housing-only):
  frontEndDTI = monthlyHousing / grossMonthlyIncome

BACK-END DTI (all debt):
  totalMonthlyDebt = housing + creditCards + auto + student + other
  backEndDTI     = totalMonthlyDebt / grossMonthlyIncome

28/36 RULE THRESHOLDS:
  healthyFrontEnd  = backEndDTI ≤ 0.36 AND frontEndDTI ≤ 0.28
  cautionFrontEnd  = backEndDTI ∈ (0.36, 0.43] OR frontEndDTI ∈ (0.28, 0.35]
  high             = backEndDTI > 0.43 OR frontEndDTI > 0.35

RECOMMENDED MAXIMA:
  maxRecommendedHousing   = grossMonthlyIncome × 0.28
  maxRecommendedTotalDebt = grossMonthlyIncome × 0.36

CATEGORY SHARES (for the pie chart):
  share = categoryAmount / totalMonthlyDebt

Example: $7,000 gross monthly income, $1,500 housing, $200 credit cards,
         $300 auto, $250 student, $50 other
  totalMonthlyDebt     = 2,300
  frontEndDTI          = 1,500 / 7,000 = 21.4% (healthy)
  backEndDTI           = 2,300 / 7,000 = 32.9% (healthy)
  meets 28/36 rule     = YES
  max housing          = $1,960
  max total debt       = $2,520
  housing share of debt = 65.2% (concentrated in housing, normal)
  back-end headroom     = $220

Note: DTI is one of several factors lenders consider. Credit score, down
payment size, reserves (savings), employment history, and the type of loan
(conventional, FHA, VA, jumbo) all affect the actual approval decision.

Glossary

Key Terms

FAQ

Frequently Asked Questions

Scenario Calculators

DTI on $60K Income for a $250K House

Calculate your debt-to-income ratio for buying a $250,000 house on a $60,000 income. See if you qualify under the 28/36 rule.

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Texas FHA Loan DTI Requirements Calculator

Calculate your DTI ratio for a Texas FHA loan. See Texas FHA loan limits, DTI requirements, and qualification thresholds for 2026.

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