DTI = monthly debt payments ÷ gross monthly income, including your future housing payment. Most programs allow up to ~43–50% (back-end), depending on loan type, credit & down payment. Lower is safer & can improve your rate. Pair with credit score.
How DTI is calculated
Add up your monthly debt payments — your future housing payment (principal, interest, taxes, insurance, HOA) plus car loans, student loans, credit card minimums, and other loan payments — then divide by your gross monthly income. Utilities, insurance, groceries, and similar living expenses don't count.
| Type | What it counts |
|---|---|
| Front-end DTI | Housing payment ÷ income |
| Back-end DTI | All debts (incl. housing) ÷ income — the one lenders focus on |
Example: $2,800 total monthly debts ÷ $7,000 gross income = 40% back-end DTI.
DTI limits by program (2026)
| Program | Typical back-end max |
|---|---|
| Conventional | ~43–50% (with compensating factors) |
| FHA | Often to ~50%+ with strong factors |
| VA | Flexible; residual income matters |
| Non-QM | Varies; some qualify on cash flow instead |
Limits vary by lender, credit, down payment & automated underwriting; illustrative for 2026.
How to lower your DTI
Pay down high-payment debts
Target big monthly payments (cards, car) — removing one helps immediately.
Avoid new debt
No new loans/financed purchases before or during the process.
Increase documented income
Raise, second job, or bonus/overtime history.
Buy lower or put more down
Smaller loan → smaller housing payment → lower DTI.
Choose the right program
Some allow higher DTI or qualify on cash flow.
Debt-to-income FAQs
What is DTI?
Monthly debt payments ÷ gross income, including your future housing payment.
What DTI do I need?
Often up to ~43–50% back-end, depending on program & factors.
Front-end vs back-end?
Front = housing only; back = all debts. Lenders focus on back-end.
What debts count?
Housing + car/student/card minimums/loans. Not utilities/groceries.
How to lower it?
Kill a monthly payment, avoid new debt, add income, buy lower, right program.
Reviewed by the licensing team at Save Financial, a California-licensed mortgage brokerage (NMLS #377740, DRE #01875766) founded in 2009 and serving all 58 counties.