What Is Debt-to-Income (DTI) and Why It Matters
Your debt-to-income ratio is the single number lenders lean on most. Here's how it's calculated, what counts, and the thresholds that decide your rate.
Last updated: 2026-07-20
Debt-to-income ratio, or DTI, is the share of your gross monthly income that goes to debt payments. Lenders use it as a quick read on whether you can take on more debt without overextending — and it heavily influences both whether you're approved and the rate you're offered.
How DTI is calculated
Add up your recurring monthly debt payments — rent or mortgage, car loans, student loans, minimum credit-card payments — and divide by your gross (pre-tax) monthly income. Multiply by 100 for a percentage. If you pay $1,800 in debts on $6,000 of income, your DTI is 30%.
The thresholds that matter
- Under 36% — considered healthy; you'll usually see the best terms.
- 36–43% — acceptable for most mortgages, but with less room to spare.
- Above 43% — many conventional mortgage programs stop here; approval gets harder.
Front-end vs back-end DTI
Lenders sometimes split DTI in two: the front-end ratio counts only housing costs, while the back-end ratio counts all debt. A common rule of thumb is 28% front-end and 36% back-end (the “28/36 rule”). Lowering either one — by paying down debt or increasing income — improves how much you can borrow.
Check your own ratio and see how it affects what you can borrow with the calculators below.