By the HomeAffordLab team · Last updated October 27, 2026
Your debt-to-income ratio (DTI) is the share of your gross monthly income that goes to debt payments, including your future mortgage. Most lenders want it at or below 36% to 45%, and Fannie Mae’s automated system can approve conventional loans up to 50%. FHA guidelines start at 31% for housing and 43% for all debts.
DTI is the number that decides how big a mortgage you can get. On a $90,000 income with $500 in other monthly debts, the difference between a 36% limit and a 50% limit is the difference between a home of about $268,000 and one of about $397,000. This guide shows how to calculate your DTI, the limits for each loan type, and how to lower it.
Key takeaways
- DTI = total monthly debt payments ÷ gross monthly income.
- Lenders look at two ratios: front-end (housing only) and back-end (housing plus all other debts).
- Common limits: 36% to 45% for conventional loans (up to 50% with automated approval), 31%/43% for FHA, 41% for VA, and 29%/41% for USDA.
- Every $100 of monthly debt you pay off frees about $100 of monthly payment for housing once the back-end ratio is your limit.
In this guide: How to calculate DTI · What counts as debt · DTI limits by loan type · How DTI changes your budget · How to lower your DTI · FAQ
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Includes property tax, homeowners insurance, PMI or FHA mortgage insurance, and HOA dues.
How to calculate your debt-to-income ratio
Add up the minimum monthly payments on your debts, including the mortgage payment you expect, and divide by your income before taxes.
DTI = total monthly debt payments ÷ gross monthly income × 100
Lenders calculate two versions:
- Front-end ratio: only your housing payment, meaning principal, interest, property taxes, homeowners insurance, mortgage insurance, and HOA dues.
- Back-end ratio: your housing payment plus every other monthly debt payment. When people say “DTI,” they usually mean this one.
Example: You earn $72,000 a year, or $6,000 a month. You pay $400 for a car loan, $250 for student loans, and $100 in credit card minimums, for $750 a month. If the home you want has a full payment of $1,800:
| Ratio | Calculation | Result |
|---|---|---|
| Current DTI (before the mortgage) | $750 ÷ $6,000 | 12.5% |
| Front-end ratio | $1,800 ÷ $6,000 | 30.0% |
| Back-end ratio | ($1,800 + $750) ÷ $6,000 | 42.5% |
That back-end ratio of 42.5% is above the 28/36 rule’s comfortable level but within what many lenders approve. That’s why it pays to know both your comfortable number and the lender’s limit.
What counts as debt in a DTI ratio
| Included | Usually not included |
|---|---|
| Your new mortgage payment, including taxes, insurance, mortgage insurance, and HOA dues | Utilities, phone, and internet bills |
| Car loans and leases | Groceries, gas, and other living expenses |
| Student loan payments | Health, car, and life insurance premiums |
| Minimum credit card payments | Subscriptions and memberships |
| Personal loans and buy-now-pay-later plans that appear on your credit report | Income taxes and retirement contributions |
| Child support and alimony you pay | Rent you’ll stop paying after you buy |
| Payments on other properties you own | Debts with fewer than 10 payments left, in some cases |
Lenders use the minimum payment shown on your credit report, not what you actually pay. Student loans in deferment or on an income-driven plan follow special rules that vary by loan program, so ask your lender how it will count yours.
DTI limits by loan type
| Loan type | Front-end guideline | Back-end guideline | Can it go higher? |
|---|---|---|---|
| Conventional (Fannie Mae) | None set | 36% for manually underwritten loans | Up to 45% manually with strong credit and reserves; up to 50% through Desktop Underwriter |
| FHA | 31% | 43% | Yes, with compensating factors such as cash reserves or minimal payment increase, and through automated approval |
| VA | None set | 41% | Yes, if you pass the VA residual income test |
| USDA | 29% | 41% | Sometimes, with automated approval and strong credit |
These are program limits. Individual lenders can set stricter ones, and a high DTI usually needs to be balanced by a stronger credit score, a bigger down payment, or savings left over after closing.
How your DTI limit changes how much house you can afford
The table uses our affordability calculator for a household earning $90,000 a year with $500 in other monthly debts, $25,000 down, a 7.32% 30-year rate, 1.0% property tax, $2,450 a year in insurance, and 0.5% PMI.
| DTI limit | Maximum housing payment | Home price |
|---|---|---|
| 28/36 rule (comfortable) | $2,100 | $255,000 |
| 36% back-end only | $2,200 | $268,000 |
| 43% back-end | $2,725 | $332,000 |
| 45% back-end | $2,875 | $351,000 |
| 50% back-end | $3,250 | $397,000 |
Your other debts matter just as much. Under a 45% limit, the same household could reach about $412,000 with no other debt, $351,000 with $500 a month, and $289,000 with $1,000 a month.
Being approved at 50% doesn’t mean it’s wise. Half of your gross income going to debt leaves little for taxes, savings, childcare, and surprises. Our guide to how much house you can afford explains why the 28/36 rule is a safer target.
How to lower your DTI before you apply
- Pay off small balances first. Clearing a card or loan removes its whole minimum payment from the calculation.
- Target the biggest payments. A car loan with a $450 payment does more damage to your DTI than a credit card with a $35 minimum, even if the card balance looks scarier.
- Avoid new debt. Don’t finance a car or furniture until after closing. New accounts can also lower your credit score.
- Document all your income. Bonuses, overtime, part-time work, and self-employment income can count if you have a steady two-year history.
- Add a co-borrower. A spouse or partner’s income can lower the ratio, though their debts count too.
- Choose a cheaper home or a bigger down payment. A smaller loan lowers the housing payment directly and may remove PMI.
Frequently asked questions
What is a good debt-to-income ratio for a mortgage?
36% or less is considered comfortable and gives you the most loan options. Many lenders approve up to 43% to 45%, and some conventional loans go up to 50% with automated approval.
Is DTI based on gross or net income?
Gross income, meaning before taxes and other deductions. That’s one reason a payment that fits a lender’s DTI limit can still feel tight on your take-home pay.
Does rent count in my DTI?
Your current rent doesn’t count once you buy, because the new mortgage payment replaces it. Lenders use the proposed mortgage payment instead.
Does my DTI affect my credit score?
No. Credit scores don’t include income. However, the balances behind your DTI, especially credit card balances, do affect your score through your credit utilization.
The bottom line
Your debt-to-income ratio sets the ceiling on what a lender will offer, and your other debts shrink that ceiling dollar for dollar. Aim for a back-end ratio of 36% or less for a comfortable budget, know that many lenders go to 43% to 50%, and pay down high-payment debts before you apply. Try different debt amounts in the calculator above to see how much each payment costs you in buying power.
Estimates only. HomeAffordLab is not a lender and does not provide financial advice. This page may contain ads. See our Advertising Disclosure.
Sources: Fannie Mae Selling Guide B3-6-02, Debt-to-Income Ratios · HUD Handbook 4000.1 (FHA) · CFPB: What is a debt-to-income ratio? · Freddie Mac Primary Mortgage Market Survey