Debt-to-Income (DTI) Calculator
Lenders judge you by debt-to-income ratio (DTI): your monthly debts divided by your gross monthly income. See your front-end and back-end DTI, what lenders want to see, and how paying off one card changes the picture.
Your debt-to-income ratio
How it works
Lenders use two ratios. Front-end DTI is housing costs divided by gross monthly income — most mortgage lenders want it at or under 28%. Back-end DTI adds every other monthly debt — car loans, student loans, and credit card minimums — and lenders usually want it at or under 36%, with 43% as the hard ceiling for a qualified mortgage.
Credit card minimums punch above their weight here. A $5,000 balance might carry a $150 minimum — that is $150 of monthly debt capacity a lender counts against you, even though the balance itself is small next to a mortgage. Pay the card off and the whole $150 disappears from the ratio. That is why paying off a small card before applying for a mortgage or car loan can change the answer.
Two honest notes. First, DTI uses minimum payments, not your balance — so a card you pay in full every month barely counts, while a card you carry counts every month. Second, DTI is not the whole story: lenders also check credit score, down payment, and reserves. But DTI is the number you can move fastest, and card minimums are the easiest part of it to move.
Frequently asked questions
What is a good debt-to-income ratio?
Under 36% back-end DTI is the range most lenders prefer. 37–43% is usually still workable for a mortgage. Above 43%, most mortgage lenders will decline, and auto lenders charge more.
Do lenders count my full card balance or just the minimum?
Just the minimum payment. That is why paying a card off entirely helps so much: the whole minimum disappears from your monthly debts, even if the balance was only a few thousand dollars.
Does paying my card in full every month help my DTI?
Yes. A card with a $0 balance has a $0 minimum, so it adds nothing to your DTI. That is one more reason to pay the statement balance in full when you can.
Why is the limit 43%?
43% is the ceiling for a Qualified Mortgage under federal rules — loans above it lose key legal protections for the lender, so most lenders simply won't go there. Some government programs (FHA, VA) allow higher ratios with compensating factors.
Can I lower my DTI without paying off debt?
Raising gross income works too, but it is slower. The fastest lever is usually card minimums: they fall as balances fall, and a paid-off card removes its minimum entirely.
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