Debt Ratio Calculator · Practical guide
Debt-to-Income Ratio for Mortgage Approval
Most lenders approve at 36% back-end DTI or less, stretch to 43%, and rarely go beyond — check where you land first.
At a glance
Quick answer
For mortgage approval, lenders generally want a front-end DTI of 28% or less (the new housing payment divided by gross income) and a back-end DTI of 36% or less (all monthly debts divided by gross income). Many programs, including FHA, will stretch the back-end ratio to 43% — but rarely beyond it.
Interactive tool
Debt Ratio Calculator
Enter your own values, then compare the result with the examples below.
Results
The Two Numbers Underwriters Check
The front-end ratio isolates the proposed housing payment: principal, interest, taxes, and insurance. The back-end ratio adds car payments, credit card minimums, student loans, and any other recurring debt. Both must pass — a great overall ratio cannot rescue an oversized house payment.
Example: Walking the 43% Line
| Item | Monthly amount |
|---|---|
| Gross income | $5,000 |
| Proposed housing payment | $1,200 (24% front-end) |
| Car + cards + student + other | $900 |
| Back-end DTI | $2,100 / $5,000 = 42% |
This borrower passes, but barely — one new $100 monthly obligation would push them over 43% into the high-risk band.
If Your Ratio Is Too High
- Pay off a small loan entirely to delete its monthly payment from the ratio.
- Lower the target home price so the housing payment fits the 28% line.
- Add a co-borrower's income, or wait for a documented raise to take effect.
Run your numbers above before you shop, so you negotiate with lenders from strength instead of surprise.
Frequently Asked Questions
What DTI do conventional loans require?
Conventional loans typically cap the back-end DTI at 36% for standard approval, with automated underwriting sometimes allowing up to 45-50% for borrowers with strong credit and reserves.
Does a mortgage pre-approval check DTI?
Yes — DTI is one of the core pre-approval tests, alongside credit score and down payment. Knowing your ratios before applying avoids a surprise denial.
Do student loans in deferment still count?
Usually yes. Lenders typically count a percentage of the deferred balance as a monthly obligation even when no payment is currently due.
Will paying off my car before applying help?
Yes, if the remaining term is short. Eliminating a $350 car payment drops your back-end DTI by 7 percentage points on a $5,000 income — often the difference between approval and denial.