Your debt-to-income ratio (DTI) is your total monthly debt payments, including the new mortgage, divided by your gross monthly income. Lenders use it to judge whether you can afford a loan. Many conventional loans allow up to about 45% to 50% with strong credit and savings, and FHA can go higher, but 36% or less is a more comfortable target.
How to calculate it
Add up the monthly payments that appear on your credit report, plus the new housing payment:
- The new mortgage payment, including property tax, insurance, mortgage insurance and HOA dues.
- Car loans and leases.
- Student loans.
- Minimum payments on credit cards.
- Personal loans, child support and alimony.
Divide by your gross (before-tax) monthly income. If you earn $8,000 a month and your debts including the new mortgage total $3,200, your DTI is 40%.
Try it: Debt-to-income calculatorEnter your income and debts to see your ratio, and how paying something off changes what you can borrow.Front-end and back-end ratios
The front-end ratio counts only housing costs; the back-end ratio counts all debts. The traditional 28/36 guideline means housing under 28% and all debts under 36%. Most approvals today focus on the back-end ratio.
| Loan | Typical maximum back-end DTI |
|---|---|
| Conventional | About 45% to 50% with strong factors |
| FHA | Often up to about 50% to 57% with automated approval |
| VA | 41% guideline, but higher is allowed with enough leftover income |
| USDA | About 29% housing / 41% total, higher with strong factors |
What doesn’t count
Utilities, phone bills, insurance other than homeowners, groceries and other living costs usually aren’t included, which is why a DTI that a lender approves can still feel tight in real life.
How to lower your DTI
- Pay off a small loan entirely to remove its payment.
- Pay down credit cards to lower minimum payments.
- Add a co-borrower’s income, though their debts count too.
- Buy a less expensive home or put more down.
- Look for lower taxes and insurance, which reduce the housing payment; compare towns with the property tax estimator.
See how it sets your budget
The pre-approval estimator shows roughly what a lender might approve, and the affordability calculator shows what’s comfortable. If student loans are part of your debts, see buying a home with student loans.
Common questions
What is a good debt-to-income ratio for a mortgage?
Under 36% is comfortable. Many loans allow up to about 45% to 50%, and FHA sometimes more with strong factors.
Does DTI include utilities?
No. It includes debts on your credit report, child support and alimony, and the new housing payment, but not utilities or living costs.
How can I lower my DTI quickly?
Pay off a small loan entirely, pay down credit card balances, or add a co-borrower’s income.
Updated October 2026. Educational content. OfferBacked is not currently a lender and doesn’t issue pre-approvals or loans.