Your debt-to-income ratio is one of the first numbers a lender checks when you apply for a mortgage, car loan or personal loan. Enter your gross monthly income (before taxes) and your total monthly debt payments to get your DTI instantly.
The DTI Formula
Include recurring debt obligations: rent or mortgage, auto loans, student loans, credit card minimum payments and personal loans. Don’t include utilities, groceries, subscriptions or insurance — lenders treat those as living expenses, not debt.
Worked Example
Gross income of $6,000/month with $2,100 in monthly debt payments gives a DTI of 35% — just inside the range many conventional mortgage lenders like to see.
How Lenders Read Your DTI
- Under 36% — generally considered healthy; strongest approval odds and pricing
- 36–43% — often still approvable, but with more scrutiny
- 43–50% — the upper limit for many loan programs, usually requiring strong compensating factors
- Over 50% — most lenders will decline; focus on paying down debt first
Frequently Asked Questions
What counts as debt in a DTI calculation?
Recurring obligations: rent or mortgage payment, car loans, student loans, credit card minimums, personal loans, and court-ordered payments. Utilities, groceries and insurance premiums generally don’t count.
What DTI do I need for a mortgage?
Many conventional lenders prefer 36% or below, with most programs capping approvals around 43–50% depending on compensating factors like credit score and reserves.
How can I lower my DTI?
Reduce monthly debt payments or increase gross income. Fully paying off one small loan often moves the ratio more than partially paying a large one, because it removes an entire monthly payment.