Debt-to-Income Ratio (DTI): Formula, Limits & Mortgage Approval
Calculate your debt-to-income ratio and learn the 28/36 rule lenders use to approve mortgages and loans.
Free calculators — instant results, no signup required.
Key Takeaways
- 1DTI = monthly debt payments ÷ gross monthly income × 100.
- 2Mortgage lenders prefer DTI under 43%; ideal is 36% or lower.
- 3Front-end DTI (housing only) should stay under 28%.
- 4Paying off debt before applying can qualify you for a larger loan.
Debt-to-income ratio is one of the first numbers lenders check. A high DTI means rejection or worse rates — even with a great credit score.
See how extra payments lower DTI using our debt payoff calculator.
How to Calculate DTI
Add all monthly debt payments: mortgage/rent, car loans, student loans, credit card minimums, personal loans. Divide by gross (pre-tax) monthly income.
Example: $2,000 debt ÷ $6,000 income = 33% DTI.
The 28/36 Rule
Housing costs alone should not exceed 28% of gross income. Total debt should not exceed 36%. Some lenders allow up to 43% with strong credit.
Use our how much house can I afford guide to work backward from income.
How to Lower DTI Before Applying
Pay off small debts completely (removes the payment). Avoid new loans or credit cards for 3–6 months before a mortgage application.
Improving credit can also help — see credit score ranges.
Continue Reading
Ready to run your own numbers?
Explore All Calculators