37.6%
Total Debt-to-Income Ratio
$6,250.00
$2,350.00
24%
Housing Costs Only
37.6%
All Debt Payments
Bonuses, alimony, investment income, etc.
Front-End (Housing)
24%
Great! You are under the 28% recommended limit for housing costs.
Back-End (Total)
37.6%
Manageable. You should qualify for most conventional loans.
Based on your income and existing debts, here's your maximum estimated housing allowance:
| DTI Target | Max Monthly Payment |
|---|---|
| 28% (Ideal) | $1,750.00 |
| 36% (Standard) | $1,400.00 |
| 43% (Max) | $1,837.50 |
* Estimates only. Excludes down payment, credit score, and interest rate factors.
Understanding DTI Requirements
Excellent: < 28%
You're in great shape! Most lenders will view you as a low-risk borrower with room in your budget.
Good: 28-36%
You should qualify for most mortgages. This is the standard range lenders consider acceptable.
High: > 43%
Most conventional lenders won't approve loans above 43%. Focus on paying down debt before applying.
Frequently Asked Questions
What is debt-to-income ratio (DTI)?
DTI is your total monthly debt payments divided by your gross monthly income, expressed as a percentage. For example, if you pay $2,000/month in debts and earn $6,000/month, your DTI is 33%. Lenders use this to gauge your ability to take on new debt.
What debts are included in DTI calculation?
Include: mortgage/rent, car loans, student loans, credit card minimum payments, personal loans, child support/alimony. Don't include: utilities, insurance (unless part of mortgage), food, entertainment, or other living expenses.
What DTI do I need for a mortgage?
Conventional loans typically require DTI under 43%, with ideal being under 36%. FHA loans may allow up to 50%. The housing portion (front-end DTI) should ideally be under 28%. Lower DTI can mean better rates and terms.
How can I lower my DTI to qualify for a mortgage?
Pay off credit cards or loans (especially high-payment ones), increase your income, avoid new debt, consider refinancing high-payment loans, and hold off on major purchases before applying. Even small reductions can help.
Ready to buy a home?
Sign up for iBudget to track your DTI, manage debt payoff, and prepare your finances for homeownership.