43%
Max back-end DTI for most conventional loans
28%
Ideal front-end housing ratio
50%
Max DTI allowed on some FHA loans
36%
Traditional maximum back-end DTI guideline
Front-end vs. back-end DTI
Front-end DTI (the housing ratio) divides your proposed monthly housing cost — principal, interest, taxes, insurance, and HOA — by your gross monthly income. Back-end DTI (total DTI) divides all monthly debt payments — housing plus car loans, student loans, credit card minimums, and personal loans — by gross income. Lenders evaluate both; the back-end number is the binding constraint for most applicants.
What counts as debt in the calculation
- The proposed new mortgage payment (PITI including PMI and HOA)
- Minimum credit card payments (not the full balance, just the minimum)
- Auto loan monthly payments
- Student loan payments — or 1% of the balance if in deferment
- Personal loan payments
- Child support and alimony obligations
- Co-signed loan payments if the primary borrower's payments aren't documented
How to use the DTI calculator
- Enter your gross monthly income (before taxes)
- Add each monthly debt payment — car, student, credit card minimums
- Enter the proposed housing payment from your mortgage calculator
- Review your front-end and back-end DTI ratios
- Compare against the thresholds for conventional (43%), FHA (50%), and VA (41%) loans
- Identify which debts to pay down to improve your ratio before applying
💡 Quick DTI fix
Paying off a small installment loan — even a $150/month car payment with 8 months remaining — can drop your back-end DTI by 1–2 percentage points. This small action can be the difference between loan approval and rejection, or between a standard rate and a better one.
Common mistakes to avoid
- Using net (after-tax) income instead of gross income in the calculation
- Forgetting that deferred student loans are counted at 1% of the balance per month by most lenders
- Applying for new credit before closing — new debt changes your DTI mid-process
- Not including HOA dues in the housing expense ratio
- Assuming a high credit score compensates for a high DTI — they're largely separate factors
Related calculators
Use the Home Affordability Calculator to find the maximum purchase price that keeps your DTI within guidelines. The Mortgage Calculator gives you the exact PITI to plug into your back-end DTI calculation. And the Credit Card Payoff Calculator helps you plan a debt reduction strategy to lower your DTI before applying.