Debt-to-Income Ratio Calculator: Will Your DTI Qualify?
Will your debt-to-income ratio qualify for a mortgage? This debt-to-income ratio calculator gives both ratios lenders check, housing alone and all debts, against conventional, FHA and VA limits, with the dollars a month left under each.
Example numbers
The figures behind it
- Back-end ratio
- 35.00%
- All monthly debt payments, housing included, over gross monthly income.
- Front-end ratio
- 27.14%
- The housing payment alone. Of the limits here, only FHA tests it.
- Limits you meet
- 5 of 5
- Total monthly debt
- $2,450.00
- Housing payment plus other debt payments.
- Housing payment$1,900
- Other debt payments$550
- Left for tax and everything else$4,550
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The table scrolls sideways
| Program | Limit | Room for housing | Room for other debt |
|---|---|---|---|
| Conventional manual underwriting | 36% | $70.00 | $70.00 |
| VA | 41% | $420.00 | $420.00 |
| FHA manual underwriting | 31% housing, 43% total | $270.00 | $560.00 |
| Conventional manual, strong credit and reserves | 45% | $700.00 | $700.00 |
| Conventional automated underwriting | 50% | $1,050.00 | $1,050.00 |
What this result assumes
- These limits are underwriting guidelines, not laws. Lenders go above them with compensating factors such as cash reserves or a strong credit score, and many set tighter limits of their own.
- Income here is gross, before tax. A ratio inside every limit can still be a payment that leaves too little of your take-home pay.
- Only monthly payments count, not balances. Paying a loan off removes its payment; paying an installment loan down usually leaves the payment unchanged.
The limits are underwriting guidelines rather than laws: conventional manual underwriting allows 36%, or 45% with strong credit and reserves, and automated approval can reach 50%.
Methodology
Reviewed by Acun Özdilek
Two ratios from one income
The front-end ratio is the housing payment divided by gross monthly income. The back-end ratio is the housing payment plus every other monthly debt payment, divided by the same income. The housing figure is the whole payment: principal and interest, property tax, home insurance, mortgage insurance and HOA dues. The mortgage calculator builds that payment from a price and rate.
Where the limits come from
Conventional loans follow the Fannie Mae Selling Guide (B3-6-02): 36% of income for all debts when a loan is underwritten by hand, up to 45% when the borrower meets its credit-score and reserve requirements, and 50% through automated underwriting. None of them sets a separate housing ratio.
FHA manual underwriting allows 31% for housing and 43% for all debts without compensating factors (HUD Handbook 4000.1). Automated approvals, which FHA also uses, can allow more. VA uses a 41% guideline for all debts (38 CFR 36.4340), with no housing ratio and a residual-income test that can justify a higher ratio.
Room, in dollars
Room is the limit times your income, minus the payments you already have, to the cent. For FHA the housing room is the smaller of its two tests. Under a total limit, every dollar of other debt is a dollar the housing payment cannot use. To turn housing room into a price, the home affordability calculator solves for it.
Assumptions
- Income is gross monthly income before tax, all borrowers combined.
- The housing payment includes principal, interest, property tax, insurance, mortgage insurance and HOA dues.
- The limits are the base guidelines without compensating factors. FHA and VA automated approvals and the VA residual-income test can allow more.
- Credit score, reserves, residual income and employment tests are not modelled.
- Loan limits are not applied.
- Lender overlays (stricter in-house limits) are not modelled.
Sources
- Fannie Mae Selling Guide B3-6-02, Debt-to-Income Ratios
- HUD Handbook 4000.1, Single Family Housing Policy Handbook
- 38 CFR 36.4340, VA underwriting standards
- Fannie Mae Selling Guide B3-6-05, Monthly Debt Obligations
- CFPB, What is a debt-to-income ratio?
- CFPB, General QM loan definition final rule (Federal Register, December 2020)
- 12 CFR 1026.43(c)(2)(vii), Minimum standards for transactions secured by a dwelling
Common questions
What is the difference between front-end and back-end DTI?
The front-end ratio counts the housing payment alone; the back-end ratio adds every other debt payment. On $7,000 a month of gross income, a $1,900 housing payment is a front-end ratio of 27.14%, and adding $550 of other debts makes the back-end ratio 35.00%. Of the limits here, only FHA tests the front-end ratio.
What counts as debt in a debt-to-income ratio?
Minimum credit card payments, auto, student and personal loans, child support, alimony, loans you have co-signed, and the new housing payment. A lender can leave out a co-signed loan if the other borrower has made every payment for the past year and can show it. Utilities, phone bills, car and health insurance, groceries and the rent you are leaving do not count.
Is there a legal maximum debt-to-income ratio?
No federal law sets one maximum. In 2020 the CFPB replaced the fixed debt-to-income limit in its General QM loan definition with a price-based test, and each loan program sets its own guideline. Lenders must still consider your debt-to-income ratio or residual income under the CFPB's ability-to-repay rule.
Can I get a mortgage with a DTI above 50%?
Sometimes. 50% is the highest conventional limit here, and only automated underwriting reaches it. Automated approvals and the VA residual-income test can allow more case by case. A smaller housing payment or fewer other debts brings the ratio down.
Which debt should I pay off to lower my DTI fastest?
The one with the biggest monthly payment for each dollar of balance, because only the payment counts. A small loan with a large payment frees the most room per dollar paid. The credit card payoff calculator shows how long a card takes to clear, and debt snowball or avalanche compares the order to pay several debts in.
Is DTI based on gross or take-home pay?
Gross pay, before tax and deductions. The payment still comes out of take-home pay, so a ratio inside every limit can still leave a tight budget.
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