Anya Sharma is a Certified Financial Planner specializing in consumer debt metrics and mortgage qualification standards, ensuring calculations meet industry guidelines.
Use the authoritative **Debt To Income Ratio Calculator** to determine your eligibility for mortgages and other loans. Simply enter any three variables—Total Monthly Debt, Gross Monthly Income, Front-End DTI, or Back-End DTI—to solve for the remaining unknown value.
Debt To Income Ratio Calculator
DTI Ratio Formulas
Front-End DTI ($\mathbf{DTI_{front}}$, Housing only):
$$ DTI_{front} = \frac{M_{house}}{I_{gross}} \times 100 $$
Back-End DTI ($\mathbf{DTI_{back}}$, Total Debt):
$$ DTI_{back} = \frac{M_{house} + D_{non}}{I_{gross}} \times 100 $$
The four solution formulas (Solving for $\mathbf{DTI_{back}}$ as Q):
$\mathbf{DTI_{back}}$ (Q) $= \frac{F + P}{V}$
$\mathbf{M_{house}}$ (F) $= (Q \times V) – P$
$\mathbf{D_{non}}$ (P) $= (Q \times V) – F$
$\mathbf{I_{gross}}$ (V) $= \frac{F + P}{Q}$
Formula Source: Consumer Financial Protection BureauFormula Variables
- F ($\mathbf{M_{house}}$): Proposed total monthly housing payment (PITI: Principal, Interest, Taxes, Insurance).
- P ($\mathbf{D_{non}}$): Other recurring monthly debt payments (Car, student loan, minimum credit card payments).
- V ($\mathbf{I_{gross}}$): Gross Monthly Income (income before taxes/deductions).
- Q ($\mathbf{DTI_{back}}$): Back-End DTI Ratio. The percentage of gross income spent on ALL debt.
Related Calculators
- Loan Affordability Calculator
- Mortgage Payment Calculator (PITI)
- Home Equity Loan Calculator
- Debt Consolidation Calculator
What is the Debt To Income Ratio?
The Debt-to-Income (DTI) Ratio is a personal finance measure used by mortgage lenders to assess a borrower’s ability to manage monthly payments and repay debts. It is calculated by dividing your total recurring monthly debt payments by your gross monthly income. Lenders typically look at two ratios: the **Front-End DTI** (only housing costs) and the **Back-End DTI** (housing plus all other recurring debts).
For most conventional mortgages, lenders look for a **Back-End DTI (Q)** under **43%**, though many prefer it below 36%. A lower DTI indicates that you have more income available to cover your debts, making you a less risky borrower. Knowing your DTI is the critical first step before applying for any major loan, especially a mortgage.
How to Calculate Required Income (Example)
Let’s find the minimum Gross Monthly Income ($\mathbf{I_{gross}}$, V) required if the Proposed Housing Payment ($\mathbf{M_{house}}$) is \$2,000, Other Debt ($\mathbf{D_{non}}$) is \$500, and the maximum acceptable Back-End DTI ($\mathbf{DTI_{back}}$) is 43\%.
- Step 1: Calculate Total Monthly Debt
Total Debt $= M_{house} + D_{non} = \$2,000 + \$500 = \$2,500$.
- Step 2: Apply the Income Formula ($\mathbf{I_{gross} = \text{Total Debt} / \mathbf{DTI_{back}}}$)
DTI must be used as a decimal: $Q_{dec} = 0.43$. $\mathbf{I_{gross}} = \$2,500 / 0.43$.
- Step 3: Determine the Required Income
The calculation yields a minimum required Gross Monthly Income ($\mathbf{I_{gross}}$, V) of **\$5,813.95**.
Frequently Asked Questions (FAQ)
While the standard qualifying limit for the Back-End DTI is 43% for many conventional and FHA loans, some lenders may accept a DTI up to 50% under specific circumstances, such as high credit scores or large down payments.
What debts are included in DTI?DTI includes recurring monthly debts that will last 10 months or more, such as credit card minimum payments, car loans, student loans, personal loans, alimony, and child support. Utilities, groceries, and insurance (not escrowed PITI) are typically excluded.
How can I improve my DTI ratio?You can improve your DTI ratio by either decreasing your monthly debt payments (paying down credit cards, consolidating loans) or increasing your gross monthly income (a raise, a second job). Decreasing debt usually offers the quickest impact.
Why is gross income used instead of net income?Lenders use gross income (income before taxes) to maintain a standard, consistent metric across all applicants, regardless of individual tax situations, deductions, or payroll withholding choices.