Your debt-to-income (DTI) ratio is the most important number lenders look at after your credit score. It measures what percentage of your gross monthly income goes toward debt payments. A high DTI can block approval even with a strong credit score. Use our DTI calculator to find yours.
DTI Formula
DTI = Total Monthly Debt Payments / Gross Monthly Income x 100
What counts as debt: mortgage/rent, car loans, student loans, credit card minimums, personal loans, child support. What doesn’t: utilities, insurance, groceries, subscriptions, taxes.
DTI Thresholds
| DTI Range | What It Means | Mortgage Impact |
|---|---|---|
| Under 28% | Excellent | Strong approval |
| 28-36% | Good | Easy approval |
| 36-43% | Acceptable | Generally approved |
| 43-50% | Borderline | Needs compensating factors |
| Over 50% | High risk | Likely declined |
How to Improve DTI Before Applying
Pay Off Small Accounts First
Eliminating a $3,000 personal loan with a $150/month payment reduces DTI more than $150 extra toward a $25,000 student loan. Target accounts where paying off eliminates the entire monthly payment.
Avoid New Debt
Any new loan appears in your file. In the 12 months before a mortgage application, avoid car loans, personal loans, and large credit card balances.
Increase Income
DTI improves from both sides. A raise, side income, or documented additional income source lenders can verify all improve DTI. Lenders typically require 2 years of documented self-employment income.
Debt Payoff and Financial Goal Tracker
Track your path to lower DTI with visual debt payoff planning and progress tracking.
Get the Tracker →Gross income — before taxes. If you earn $6,000 gross and pay $2,100 in debt, DTI is 35%. Lenders always use gross income.