# Debt-to-income ratio calculator (DTI)

> Calculate your debt-to-income ratio (DTI), front-end and back-end, against lender limits, and the debt cut or income rise that reaches your target.

Interactive version: https://www.calcopenly.com/finance/debt-to-income-ratio-calculator
Subject: Finance calculators

Your debt-to-income ratio (DTI) is your monthly debt payments divided by gross monthly income. The back-end ratio counts every debt payment, housing included; the front-end ratio counts only the housing payment. Lenders read the back-end figure first: Fannie Mae's maximum is 36% for manually underwritten loans, 45% with credit-score and reserve requirements and 50% through its Desktop Underwriter system.

With the defaults, $6,000 of gross monthly income and $2,200 of debt payments give a back-end DTI of 36.67% and a front-end ratio of 25%. Cutting payments by $40 a month, or earning $111.11 more, brings the back-end ratio to 36%.

Use gross income before tax. Payments count, balances do not: a card with a $4,000 balance and a $100 minimum adds $100. Living costs such as utilities, groceries and insurance other than on the home stay out.

## Inputs

- **Gross income**: Before tax: salary, wages, bonuses, alimony received, pensions and other steady income.
- **Income is** (options: Per month, Per year)
- **Rent or mortgage payment (per month)**: For a mortgage, include property tax, homeowners insurance, HOA dues and mortgage insurance. Lenders use the payment on the home you are buying.
- **Car loans and leases (per month)**
- **Student loans (per month)**
- **Credit card minimum payments (per month)**: The minimum due on each statement, not the balance or what you choose to pay.
- **Personal and other loans (per month)**
- **Child support and alimony (per month)**
- **Other monthly obligations (per month)**: Any other recurring debt payment that shows on your credit report or court order.
- **Target back-end DTI**

## Results

- Debt-to-income ratio (back-end) — main result
- Housing ratio (front-end)
- Back-end band
- Total monthly debt payments
- Gross monthly income
- Payment cut needed to reach the target
- Income increase needed to reach the target
- Gross monthly income needed at the target
- Payments you could add and stay at the target
- Largest housing payment within the target

## Formula

$$
\text{DTI}_{\text{back}} = \frac{\sum \text{monthly debt payments}}{\text{gross monthly income}} \times 100,\qquad \text{DTI}_{\text{front}} = \frac{\text{housing payment}}{\text{gross monthly income}} \times 100
$$

## Worked examples

### CFPB example: $2,000 of debts on $6,000

- Gross income: 6000
- Income is: Per month
- Rent or mortgage payment (per month): 1500
- Car loans and leases (per month): 100
- Student loans (per month): 0
- Credit card minimum payments (per month): 0
- Personal and other loans (per month): 0
- Child support and alimony (per month): 0
- Other monthly obligations (per month): 400
- Target back-end DTI: 36%
- **Debt-to-income ratio (back-end): 33.00%**
- **Housing ratio (front-end): 25.00%**
- **Total monthly debt payments: 2,000.00**
- Checked against: CFPB, What is a debt-to-income ratio?: $1,500 mortgage + $100 auto + $400 other debts = $2,000 ÷ $6,000 gross = 33%

### 45% DTI brought to 36%

- Gross income: 5000
- Income is: Per month
- Rent or mortgage payment (per month): 1400
- Car loans and leases (per month): 450
- Student loans (per month): 300
- Credit card minimum payments (per month): 100
- Personal and other loans (per month): 0
- Child support and alimony (per month): 0
- Other monthly obligations (per month): 0
- Target back-end DTI: 36%
- **Debt-to-income ratio (back-end): 45.00%**
- **Housing ratio (front-end): 28.00%**
- **Payment cut needed to reach the target: 450.00**
- **Gross monthly income needed at the target: 6,250.00**
- **Income increase needed to reach the target: 1,250.00**
- **Back-end band: Over 36%, up to 45%**
- Checked against: Hand calculation: 2,250 ÷ 5,000 = 45%; 36% × 5,000 = 1,800 so cut 450; 2,250 ÷ 0.36 = 6,250

### Annual salary of $90,000

- Gross income: 90,000
- Income is: Per year
- Rent or mortgage payment (per month): 2100
- Car loans and leases (per month): 400
- Student loans (per month): 0
- Credit card minimum payments (per month): 0
- Personal and other loans (per month): 0
- Child support and alimony (per month): 0
- Other monthly obligations (per month): 0
- Target back-end DTI: 36%
- **Gross monthly income: 7,500.00**
- **Debt-to-income ratio (back-end): 33.33%**
- **Housing ratio (front-end): 28.00%**
- **Payments you could add and stay at the target: 200.00**
- **Largest housing payment within the target: 2,300.00**
- **Payment cut needed to reach the target: not applicable**
- Checked against: Hand calculation: 90,000 ÷ 12 = 7,500; 2,500 ÷ 7,500 = 33.33%; 36% × 7,500 = 2,700, less 2,500 = 200 of room; 2,700 − 400 = 2,300

### Above Fannie Mae's 50% maximum

- Gross income: 4000
- Income is: Per month
- Rent or mortgage payment (per month): 1600
- Car loans and leases (per month): 300
- Student loans (per month): 200
- Credit card minimum payments (per month): 150
- Personal and other loans (per month): 0
- Child support and alimony (per month): 0
- Other monthly obligations (per month): 0
- Target back-end DTI: 50%
- **Debt-to-income ratio (back-end): 56.25%**
- **Back-end band: Over 50%**
- **Payment cut needed to reach the target: 250.00**
- **Income increase needed to reach the target: 500.00**
- Checked against: Hand calculation: 2,250 ÷ 4,000 = 56.25%; 50% × 4,000 = 2,000, cut 250; 2,250 ÷ 0.5 = 4,500, raise 500

### No debt payments (edge)

- Gross income: 5000
- Income is: Per month
- Rent or mortgage payment (per month): 0
- Car loans and leases (per month): 0
- Student loans (per month): 0
- Credit card minimum payments (per month): 0
- Personal and other loans (per month): 0
- Child support and alimony (per month): 0
- Other monthly obligations (per month): 0
- Target back-end DTI: 36%
- **Debt-to-income ratio (back-end): 0.00%**
- **Housing ratio (front-end): 0.00%**
- **Payments you could add and stay at the target: 1,800.00**
- **Back-end band: 36% or less**
- Checked against: Hand calculation: 0 ÷ 5,000 = 0%; 36% × 5,000 = 1,800 of room

## Questions

### How do you calculate debt-to-income ratio?

Add up your monthly debt payments and divide by your gross monthly income, then multiply by 100. The CFPB's example: a $1,500 mortgage payment, a $100 auto loan and $400 of other debts total $2,000; on $6,000 of gross monthly income the DTI is 33%. The front-end ratio uses only the housing payment, 25% here.

### What is a good debt-to-income ratio?

36% or less. The CFPB suggests keeping total debt payments at 36% of gross income or below and housing at 28% to 35%, and Freddie Mac's guideline for manually underwritten loans is 28% for housing and 36% in total. Fannie Mae accepts up to 45% with credit-score and reserve requirements and up to 50% through Desktop Underwriter.

### What is the maximum DTI for a mortgage?

50% for a conventional loan approved through Fannie Mae's Desktop Underwriter, and 45% for a manually underwritten one that meets the credit-score and reserve requirements (Selling Guide B3-6-02). FHA's manual-underwriting limits without compensating factors are 31% for housing and 43% in total. The CFPB notes some lenders go to 43% or higher.

### How can I lower my debt-to-income ratio?

Cut monthly payments or raise gross income. To reach a target, the most your debts can be is target × income, and the income you need is debts ÷ target. With $2,250 of payments on $5,000 a month (45%), reaching 36% takes cutting payments by $450 or raising income by $1,250 a month. Paying off a loan outright removes its whole payment, which usually moves the ratio fastest.

### How accurate is the debt-to-income ratio calculator?

Accuracy depends on your inputs and the method's assumptions. Decimal arithmetic uses 50 significant digits, but estimates, numerical methods and source data can be less precise; the displayed rounding does not remove those limits. It is checked against 5 worked examples whose answers come from independent sources; for example, “CFPB example: $2,000 of debts on $6,000” is checked against CFPB, What is a debt-to-income ratio?: $1,500 mortgage + $100 auto + $400 other debts = $2,000 ÷ $6,000 gross = 33%.

### Where does the method come from?

Consumer Financial Protection Bureau: What is a debt-to-income ratio?; Fannie Mae Selling Guide B3-6-02, Debt-to-Income Ratios; Freddie Mac Single-Family Seller/Servicer Guide 5401.1 and 5401.2: housing expense and debt payment-to-income ratios; CFPB, Your Money, Your Goals toolkit: debt-to-income calculator; HUD Single Family Housing Policy Handbook 4000.1 (FHA qualifying ratios).

## Sources

- [Consumer Financial Protection Bureau: What is a debt-to-income ratio?](https://www.consumerfinance.gov/ask-cfpb/what-is-a-debt-to-income-ratio-en-1791/)
- [Fannie Mae Selling Guide B3-6-02, Debt-to-Income Ratios](https://selling-guide.fanniemae.com/sel/b3-6-02/debt-income-ratios)
- [Freddie Mac Single-Family Seller/Servicer Guide 5401.1 and 5401.2: housing expense and debt payment-to-income ratios](https://guide.freddiemac.com/app/guide/section/5401.2)
- [CFPB, Your Money, Your Goals toolkit: debt-to-income calculator](https://www.consumerfinance.gov/consumer-tools/educator-tools/your-money-your-goals/toolkit/)
- [HUD Single Family Housing Policy Handbook 4000.1 (FHA qualifying ratios)](https://www.hud.gov/hud-partners/single-family-handbook-4000-1)

_Note: financial information, not professional advice._