Finance · Quick Answer
What is a good debt-to-income ratio?
A DTI under 36% is generally considered good, and most mortgage lenders cap DTI at 43% for qualified loans. Under 20% indicates strong financial health; above 43% makes borrowing difficult.
How it's calculated
DTI = total monthly debt payments / gross monthly income × 100
Include: mortgage/rent, car loans, student loans, credit card minimums, child support.
Exclude: utilities, groceries, taxes withheld.
Benchmarks
- Under 20%: excellent, plenty of borrowing room
- 20%-35%: healthy, most lenders will approve
- 36%-43%: manageable but tight, lender scrutiny begins
- 44%+: most lenders decline new credit
Front-end vs back-end DTI
Lenders look at two numbers:
- Front-end DTI (housing only), target under 28%
- Back-end DTI (all debt), target under 36%
Qualified Mortgage rules cap back-end DTI at 43% for most loans, though FHA and VA programs allow higher ratios with compensating factors.
Run the numbers
All calculators →Debt-to-Income Ratio Calculator
Calculate your DTI ratio, a key metric lenders use to evaluate loan applications.
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