See what share of your gross monthly income goes toward debt payments, and how lenders typically view your ratio.
Debt-to-income ratio (DTI) compares how much of your gross monthly income goes toward debt payments. Lenders use it to judge how much additional debt — like a mortgage — you can comfortably handle.
DTI (%) = (Total Monthly Debt Payments ÷ Gross Monthly Income) × 100. Most mortgage lenders prefer a DTI at or below 36%, and many loan programs cap it around 43%.
Someone earning $6,000 a month with $1,800 in combined debt payments has a DTI of 30% (1,800 ÷ 6,000 × 100), which falls in the “Good” range for most lenders.
Paying down credit cards or consolidating high-payment loans is usually the fastest way to lower your DTI, since it directly reduces the numerator of the ratio.
DTI = (total monthly debt payments divided by gross monthly income) x 100.
Many mortgage lenders prefer a DTI below 36-43%, though exact thresholds vary by loan type and lender.
Yes — housing costs (rent or existing mortgage) are usually included in the debt total along with credit cards, auto loans, and other recurring debt payments.