How DTI works
Your debt-to-income ratio compares required monthly debt payments to gross (pre-tax) monthly income. Lenders track two versions: the front-end ratio counts only housing, while the back-end ratio counts housing plus every other recurring debt - car loans, student loans, card minimums, and the like. The back-end number is the one that most often decides a mortgage approval.
Under 36% back-end is the traditional comfort zone; between 36% and 43% most lenders will still work with you but pricing tightens; above 43% options narrow to specific programs, and above 50% approval is unlikely. The "room left" figure shows how much monthly payment you could add - say, a new mortgage - before crossing the 36% line.
Frequently asked questions
What DTI do mortgage lenders want?
The classic conventional guideline is 28/36 - housing costs under 28% of gross income and total debt under 36%. Many loans are approved above that: FHA and some conventional programs go to 43%, and with strong credit and reserves some lenders stretch toward 50%. Lower is always cheaper and safer.
What counts as debt in a DTI ratio?
Recurring obligations on your credit report: rent or mortgage, car loans and leases, student loans, credit card minimums, personal loans, and court-ordered payments like child support. Utilities, groceries, insurance, phone plans, and subscriptions do not count, even though they affect your real budget.
How can I lower my DTI fastest?
Eliminate an entire required payment. Paying off a small loan or a card removes its full minimum from the ratio immediately, which beats spreading the same cash across several debts. Avoid new financing before applying for a mortgage, and document any raise or side income lenders can count.