What DTI do lenders look for?

It varies, but many conventional mortgage lenders prefer a DTI of 36% or lower, with some programs allowing higher ratios for otherwise qualified borrowers.

How can I lower my DTI?

Pay down existing debt, avoid taking on new debt before a major loan application, or increase your income — any of these improve the ratio.

Debt-to-Income Ratio Calculator

Calculate your debt-to-income ratio (DTI) — the percentage of your gross monthly income that goes toward debt payments, a key number lenders use to evaluate loan applications.

Total monthly debt payments

Gross monthly income

Debt-to-Income Ratio

30%

Generally considered healthy

How It Works

The DTI formula

DTI = total monthly debt payments ÷ gross monthly income × 100 — this includes things like loan payments, credit card minimums, and other recurring debt, but not everyday living expenses.

Example Calculation

Someone with $1,800 in monthly debt payments and $6,000 in gross monthly income has a 30% DTI.

Common Mistakes

Including non-debt expenses (like groceries or utilities) in the debt payment total — DTI only counts actual debt obligations.
Using net (after-tax) income instead of gross income — DTI is calculated using gross income.

Frequently Asked Questions

What DTI do lenders look for?: It varies, but many conventional mortgage lenders prefer a DTI of 36% or lower, with some programs allowing higher ratios for otherwise qualified borrowers.
How can I lower my DTI?: Pay down existing debt, avoid taking on new debt before a major loan application, or increase your income — any of these improve the ratio.