DTI formula
Back-end DTI = (Housing + All other debt payments) ÷ Gross monthly income × 100
DTI limits by loan type
| Loan type | Typical front-end limit | Typical back-end limit |
|---|---|---|
| Conventional (guideline) | 28% | 36%, up to 45–50% with strong factors |
| FHA | 31% | 43%, higher with compensating factors |
| VA | — | 41% (plus residual income test) |
| USDA | 29% | 41% |
Limits vary by lender and change over time; treat these as typical benchmarks. To see what home price fits within these limits, use the house affordability calculator.
How to use the calculator
- Enter your gross monthly income — before taxes and deductions — from all regular sources.
- Enter your monthly housing payment: rent, or mortgage principal and interest plus property tax, homeowner’s insurance and HOA dues.
- Enter other monthly debt payments: car loans, student loans, minimum credit card payments, personal loans, child support.
- Read your front-end (housing) and back-end (total) DTI and how lenders usually view them.
What counts as debt?
Lenders include payments that appear on your credit report or are legal obligations. They typically do not include utilities, phone bills, insurance (other than homeowner’s insurance in the housing payment), groceries or other living expenses. For credit cards, they use the minimum payment shown on your report, even if you pay in full each month. Student loans in deferment may still be counted using a percentage of the balance, depending on the loan program.
How to lower your DTI
- Pay down revolving debt: reducing credit card balances lowers minimum payments quickly.
- Pay off small loans entirely: clearing a loan with a few payments left removes the whole payment from the calculation (some lenders ignore installment debts with fewer than 10 payments remaining).
- Avoid new debt before applying for a mortgage, including financing furniture or a car.
- Increase documented income: a raise, a co-borrower or regular side income with a two-year history can count.
- Look at a lower home price or larger down payment to reduce the housing payment.
DTI and your budget
Lenders approve loans up to their limits, but those limits don’t account for childcare, saving for retirement or other costs. Many financial planners suggest keeping total debt payments well below the maximum — for example under 36% of gross income — to leave room for saving and emergencies. See what home price fits with the house affordability calculator.