The first number every mortgage lender computes about you — before they care about your credit score. Here it is, with the honest thresholds.
Count only required debt payments — not utilities, groceries, insurance or subscriptions. Lenders don't.
Under 36% back-end is the classic comfort zone — approvals are smooth and you have real slack in your budget. 36–43% is approvable almost everywhere but getting snug. 43% is the qualified-mortgage line most lenders treat as the standard ceiling, though some programs stretch to 50% with strong credit and reserves. Above that, the math says the problem isn't the lender — it's the budget.
Front-end counts only housing (the classic guide: under 28%). Back-end adds every required debt payment — cars, student loans, card minimums, child support. Lenders decide on the back-end number; the front-end mostly tells you whether the house itself fits your life.
DTI has exactly two levers: raise income or cut debt payments. Before house-shopping, killing a $450 car payment does more for your approval than months of scrimping — see what payoff takes with the loan payoff calculator. Then work backwards from a comfortable DTI to a price range with the affordability guide and the mortgage calculator.
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Your DTI is the share of your gross monthly income that goes to debt payments, and it's one of the first numbers a lender checks. Lenders look at two versions: the front-end ratio (just your housing payment) and the back-end ratio (housing plus car loans, student loans, credit-card minimums, and other monthly debts). Lower is safer — it signals you have room in your budget for a new loan.
A classic guideline is 28% front-end and 36% back-end. In practice many conventional loans allow a back-end DTI up to about 43–45%, and some programs stretch to 50% with strong credit and reserves. Above that, approval gets hard regardless of income. Example: on $7,000 gross monthly income, a 36% back-end target means keeping total debt payments near $2,520 — so a $500 car payment leaves about $2,020 for housing.
Gross or net income?
Lenders use gross (pre-tax) monthly income for DTI, even though you budget with take-home pay.
What counts as debt?
Required monthly payments — mortgage or rent, auto, student, personal, and minimum credit-card payments. Utilities, groceries, and insurance generally don't count.
How do I lower my DTI?
Pay down or pay off a loan (especially one with a small balance but a real monthly payment), avoid new debt before applying, or increase documented income. See the payoff calculator to target the right debt.