Debt Route Atlas

What is my debt-to-income ratio?

Two numbers, and the answer is underneath them. Nothing to sign up for, nothing stored, and no credit check of any kind.

Your debt-to-income ratio

These are general bands, not rules. Lenders differ, and so do loan programmes — FHA, VA, conventional and USDA all draw the line in different places, and an automated underwriting decision can approve a ratio a rule of thumb would reject. Treat the figure above as where you stand, not as a verdict on whether you qualify.

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What the ratio actually is

Your debt-to-income ratio is one division. Everything you must pay each month on borrowed money, divided by everything you earn each month before tax.

So $2,990 of payments against $7,900 of gross income is 37.8%. That is the whole calculation. Lenders use it because it answers a narrow question quickly: if we add a mortgage payment to this, how much of the income is already spoken for?

The part people get wrong

It is built from minimum payments, not balances. A card with $9,000 on it and a $180 minimum counts as $180. A card with $900 on it and a $180 minimum counts as exactly the same $180. The size of the debt does not appear in the ratio at all.

That has a consequence worth knowing before you spend money on it. Paying a large balance down partway barely moves the ratio, because the minimum only falls in proportion. And on a car or student loan the payment does not move at all until the balance reaches zero — so $3,000 towards a $4,100 car loan buys you nothing, while the last $1,100 removes the whole payment. Which debt you clear matters far more than how much you clear.

The full calculator ranks every one of your debts by the cash it takes to remove one point of DTI, so you can see which payoff is worth doing and which is money spent for no movement.

What is counted, and what is not

Counted: credit card minimums, car loans, student loans, personal loans, the housing payment, and court-ordered payments such as child support or alimony. Broadly, the things that appear on a credit report.

Not counted: groceries, utilities, petrol, phone bills, insurance premiums, childcare, subscriptions, savings. They take real money out of the same account, which is why a lender's idea of comfortable and yours may not agree.

Front-end and back-end

You may see two numbers quoted. The front-end ratio is the housing payment alone divided by income. The back-end ratio is everything, housing included, and it is the one that usually decides the answer. The figure at the top of this page is the back-end ratio when you have entered a housing payment.

The bands, on paper

Print this if it is easier to keep on the fridge than in a browser tab.

General bands only. Every lender and every loan programme sets its own thresholds.
RatioHow it is generally read
Under 36%Comfortable
36% to 43%Workable for most lenders
43% to 50%Tight and programme-dependent
Over 50%Difficult

Educational information only. Not financial, credit or mortgage advice. The bands above are broad conventions rather than published rules, and no lender is bound by them. Only a lender, working from your full file, can say what you qualify for.
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