Debt-to-Income Ratio Calculator

Below 36% is considered good for conventional mortgages. Below 28% is excellent. Above 43% makes it very difficult to get a mortgage (you'll need an FHA loan or compensating factors). Above 50% is considered "high risk" by most lenders—you'll likely need to pay down debt before applying.

Yes. Lenders use your minimum payment, not your actual payment. This is why paying off credit cards helps your DTI more than paying down the balance slightly. If you pay $500 toward a card but the minimum is $50, lenders only count $50 toward your DTI.

Yes. Rent counts as a monthly debt obligation. This is why it's harder to qualify for a mortgage while renting—lenders calculate DTI with both your rent and your future mortgage payment until you close and move out. Once you close, the rent drops off and only the mortgage counts.

No. Only debt payments count toward DTI: credit cards (minimum), loans (auto, student, personal), mortgage/rent, alimony, child support. Utilities, phone bills, Netflix, and gym memberships do not count toward DTI (though they matter for your personal budget).

Lenders use your net business income after expenses (from tax returns), not your gross revenue. You typically need 2 years of tax returns to prove income. If you have a lot of business deductions, your qualifying income may be lower than you expect. Some lenders offer "bank statement loans" that use 12-24 months of bank deposits instead of tax returns (but at higher interest rates).

Only if you can document that someone else has consistently made the payments for 12+ months. For example: an ex-spouse paying a joint debt per divorce decree (you need the decree + 12 months of canceled checks). Lenders are strict about this—a verbal agreement doesn't count.

Only if they're being paid in installments and reported on your credit report. Unpaid medical bills that haven't been reported don't count. As of 2026, paid medical collections are no longer on credit reports (thanks to CFPB rule changes). Unpaid medical collections under $500 also don't appear on credit reports.

DTI measures income vs. debt payments (used by mortgage lenders to assess affordability). Credit utilization measures available credit vs. balances (used by credit scoring models to assess risk). Both matter—but for different reasons. You can have a low DTI (20%) but high utilization (80%)—this means you have little debt relative to income, but you're using a lot of your available credit.

Possibly. FHA loans allow up to 50% DTI with "automated underwriting" approval (if you have compensating factors like high credit score, large down payment, or significant cash reserves). Conventional loans rarely approve above 45%. VA loans don't have an official DTI max but use a "residual income" test instead.

It depends on your income and the minimum payment. Formula: (Monthly minimum payment ÷ Gross monthly income) × 100 = DTI points dropped. Example: $150/month minimum, $6,000/month income = 2.5 percentage points dropped. Use our calculator to see your exact impact.

No. Only debts that are actually on your credit report count toward DTI. A pre-qualified offer that you haven't accepted doesn't count. However, if you open a new credit card (even if you don't use it), the issuer may report a $0 minimum payment—which doesn't hurt your DTI but also doesn't help it.

If your DTI is above 45%, pay off debt first—you may not qualify for a mortgage otherwise. If your DTI is below 36%, you can split your savings between debt payoff and down payment. A larger down payment (20%+) can sometimes offset a slightly high DTI (41-43%) because you have "equity cushion."

Ideally, wait until the paid-off debt is reflected on your credit report (typically 30-45 days after payoff). Some lenders will accept a "payoff letter" from the creditor as proof, but most want to see it on the credit report. If you're in a hurry, ask your lender about "rapid rescore"—they can manually update your credit report in 3-5 business days for a fee.