Back-end is the number lenders care about
Front-end DTI used to matter as much as back-end — the old conventional rule was 28/36 (housing under 28%, total debt under 36%). Modern automated underwriting cares almost entirely about back-end DTI. If your back-end is under 36%, the front-end almost never blocks an approval; if your back-end is over 43%, the front-end can't save it.
The 43% number isn't arbitrary — but it isn't a current regulatory cap either. It was the General Qualified Mortgage threshold the CFPB used from 2014 through October 2022. Since then, the General QM rule has been price-based (APR vs. APOR spread), not DTI-based. The 43% number still appears as the FHA back-end guideline (HUD Handbook 4000.1) and as the Small Creditor QM threshold (12 CFR 1026.43(e)(5)) — but for most conforming mortgages, what matters is your AUS finding, not a 43% line. Treat 43% as a stretch / planning ceiling, not a regulatory cliff.
What counts, what doesn't
The calculator above asks for two debt categories. What goes in each:
- Housing payment.Mortgage PITI (principal + interest + property tax + insurance) plus HOA. Renters: rent. For a purchase, lenders use the FUTURE housing payment — your new mortgage on the home you're buying — not what you're paying today.
- Other debt minimums.Auto loan payment, student loan payment (if in repayment), credit-card minimum payment per card, personal loan, co-signed loan where you're on the hook, court-ordered child support, alimony.
- NOT counted:utilities, groceries, gas, insurance not tied to housing, retirement contributions, taxes withheld at source. Lenders aren't blind to those — but they don't enter the DTI ratio.
Critical detail: lenders use the minimum on your tradeline, not what you actually pay. If you pay $400/month on a credit card with a $50 minimum, the lender uses $50 in the DTI calc. This is also why retiring a small credit-card balance entirely (so the minimum drops to $0) lowers your DTI more than throwing the same dollars at a large balance with a large minimum.
Lowering DTI fast — three plays
If the calculator above puts you in caution or high territory and you have a near-term mortgage application:
- Retire small balances entirely.A $2,000 credit card with a $40 minimum, paid to zero, removes $40 from your monthly debt — that's 0.5 percentage points of DTI on an $8k income, more on a smaller income. Cheaper than refinancing anything.
- Document additional gross income. Lenders want a 2-year history for self-employment / side business / overtime, but salaried raises and documented bonus history count immediately. Even a $300/month documented income raise drops DTI meaningfully.
- Refinance auto or student loans into longer terms. Stretching the term lowers the minimum payment. This is a short-term DTI play with a long-term interest cost — fine tactically before a mortgage application, painful if you stay on the longer term forever.
Frequently asked
What is a good debt-to-income ratio?
≤36% back-end is Fannie Mae's preferred manual-underwriting base (Selling Guide B3-6-02). Fannie Mae allows up to 45% manual with credit/reserve compensating factors and up to 50% via Desktop Underwriter; FHA underwriting tolerates up to 43% back-end (and higher with comp factors). Above 50%, most lenders decline regardless of profile. Front-end DTI (housing alone) is a secondary criterion — FHA and conservative-conventional underwriting prefer ≤28%. Note: the General Qualified Mortgage rule no longer uses a 43% DTI cap — since October 2022, General QM is defined by a price-based test (APR vs. APOR spread), not DTI. The 43% number reflects FHA guidelines + the Small Creditor QM threshold + a conservative personal-finance planning line, not a current regulatory cliff.
What's the difference between front-end and back-end DTI?
Front-end is housing payment only (mortgage PITI or rent) divided by gross monthly income. Back-end is ALL monthly debt — housing plus auto, student, credit-card minimums, personal loans, child support, alimony — divided by gross income. Lenders weight back-end more heavily in 2026; front-end matters mostly on FHA and conservative-conventional underwriting. Both numbers come from your gross monthly income (before taxes), not net.
Which debts count toward DTI?
Recurring monthly debt obligations: mortgage (PITI + HOA) or rent, auto loans, student loans (in repayment), credit-card minimum payments, personal loans, court-ordered child support and alimony, co-signed loans where you'd be on the hook. NOT counted: utilities, groceries, gas, insurance not tied to housing, retirement contributions, taxes withheld at source. Lenders pull your credit report and use the minimums on your tradelines, not the larger payments you make voluntarily.
How can I lower my DTI fast?
Two levers: pay down debt minimums (especially credit cards, where the minimum drops as the balance drops) or raise documented gross income (overtime, second job, side business with 2-year tax history). Cancelling credit cards doesn't change DTI directly — utilization affects credit score, but the calculation uses minimum-payment obligations, which a zero-balance card has at $0. The fastest move is usually retiring small balances entirely so the minimum payment goes to zero. Use the room-before-caution number above to see how much monthly-debt-payment reduction you'd need.
Does this calculator handle student-loan IDR plans?
Imperfectly — and lender treatment varies. The calculator uses the monthly payment you enter. For Income-Driven Repayment plans, lenders historically used either the actual IDR payment, a 1% of balance estimate, or the standard-10-year payment — Fannie Mae and Freddie Mac differ from FHA, and the rules have changed multiple times since 2024. If you're on an IDR plan, ask your lender which figure they'll use BEFORE running these numbers — the difference can be 2-5 percentage points of DTI on a six-figure student-loan balance, which is enough to flip your approval band.
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Engine logic in lib/calculator/dti.ts. Threshold values sourced: Fannie Mae Selling Guide B3-6-02 (36% manual base, up to 45% with comp factors, up to 50% via Desktop Underwriter); HUD Handbook 4000.1 II.A.5.d.iii (FHA 31% front-end / 43% back-end guidelines); 12 CFR 1026.43(e)(2) — current General QM (price-based since October 2022; the prior 43% DTI cap was eliminated by the December 2020 General QM Final Rule); 12 CFR 1026.43(e)(5) — Small Creditor QM (still a 43% DTI threshold for narrow small-creditor scope). Classification labels (safe / caution / high / critical) are PayoffMath labels wrapping the sourced thresholds — not lender-published categories. Not financial advice; lender underwriting varies and is the source of truth for any specific approval decision.