Your debt-to-income ratio (DTI) is one of the most important numbers lenders look at. Calculate your front-end and back-end DTI to understand your borrowing power and financial health.
Monthly Debt Payments
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| Back-End DTI | Rating | Lender View |
|---|---|---|
| Under 20% | Excellent | Very strong borrower — best rates available |
| 20% – 35% | Good | Comfortably within lending criteria |
| 36% – 43% | Acceptable | Most lenders' upper limit — may limit options |
| 44% – 49% | High | Specialist lenders only — higher rates likely |
| 50% + | Very High | Most lenders will decline — focus on reduction |
Your debt-to-income ratio is your total monthly debt payments divided by your gross monthly income, shown as a percentage. If you pay $1,500 a month toward debts and earn $5,000 a month before tax, your DTI is 30%.
Lenders lean heavily on DTI to judge how much new borrowing you can handle. A lower ratio signals more breathing room; a high ratio suggests your income is already stretched, which can affect approval and the rate you're offered.
Estimates only, and not financial advice. Figures assume a fixed interest rate — always check your loan or card agreement for the exact terms.
Lower is better. As a rough guide, under 36% is generally seen as healthy, and many mortgage lenders prefer total DTI at or below around 43%. The exact threshold varies by lender and loan type.
Add up your monthly debt payments — loans, cards, mortgage or rent depending on the lender — and divide by your gross (pre-tax) monthly income, then multiply by 100 to get a percentage.
It tells lenders whether you can comfortably take on the new payment. A high DTI suggests your income is already committed, so lenders may decline the application or offer a higher rate.
Pay down existing debts (especially the ones with the largest monthly payments), avoid taking on new debt, and where possible increase your income. Even clearing one small loan can move the ratio.