Reviewed by Jeff Shin, NMLS #1041652. Updated .
Also called: DTI, back-end ratio.
How to calculate DTI
The CFPB defines DTI as all your monthly debt payments divided by your gross monthly income. Add up the minimum payments that show on your credit report, add the proposed house payment with taxes, insurance, mortgage insurance, and HOA dues, then divide by your income before taxes.
Everyday costs such as groceries and utilities are not debts, so they are not part of the ratio.
Front-end and back-end ratios
Lenders sometimes quote two numbers. The front-end ratio counts only the housing payment. The back-end ratio counts the housing payment plus every other monthly debt. When people say DTI, they usually mean the back-end number.
DTI limits by loan type
The CFPB notes that different loan products and lenders set different DTI limits. A few agency rules worth knowing:
- VA. Under VA underwriting standards, 41% is the benchmark ratio. A higher ratio can still be approved with justification, and that extra review is not required when residual income beats the VA guideline by at least 20%.
- Conventional. Fannie Mae’s automated underwriting weighs DTI together with credit, savings, and down payment, so a stronger file can carry a higher ratio.
- FHA. HUD sets FHA ratio rules in Handbook 4000.1, and lenders often add their own limits on top.
Example
The CFPB’s own example: a $1,500 mortgage payment, a $100 car loan, and $400 in other debts total $2,000 a month. With $6,000 in gross monthly income, $2,000 ÷ $6,000 = a DTI of about 33%.
Illustrative example only, not a quote. Actual APR and terms vary.
Related terms
- PITI and PITIA
- VA residual income
- Pre-approval vs. prequalification
- Debt service coverage ratio (DSCR)
Related on BankPricer
- Affordability calculator
- Mortgage pre-approval
- Debt consolidation calculator
- Installment debt near payoff
Sources
Definitions on this page are summarized from the agencies that set the rules. Lenders can add stricter requirements. Checked October 7, 2026.
Not sure which of these applies to you?
That is usually the actual question. Send the situation rather than the product name — purchase or refinance, primary or investment, price range, and timeline — and you get the structures that fit, with what each one costs.