Guaranteed Rate Affinity Mortgage Calculator

Mortgage Debt-to-Income (DTI) Calculator

Calculate your back-end DTI ratio to see where you stand for mortgage pre-approval.

Your total pre-tax income per month.

Sum of car loans, student loans, credit card minimums, etc. Exclude current rent/mortgage.

Projected Principal, Interest, Taxes, and Insurance for the new home.

function calculateDTI() { var incomeInput = document.getElementById('grossIncome').value; var debtInput = document.getElementById('nonHousingDebt').value; var housingInput = document.getElementById('futureHousing').value; var resultDiv = document.getElementById('dtiResult'); // Ensure inputs are valid numbers var income = parseFloat(incomeInput); var nonHousingDebt = parseFloat(debtInput); var futureHousing = parseFloat(housingInput); if (isNaN(income) || isNaN(nonHousingDebt) || isNaN(futureHousing) || income <= 0 || nonHousingDebt < 0 || futureHousing < 0) { resultDiv.style.display = 'block'; resultDiv.innerHTML = 'Please enter valid positive numbers for all fields. Gross income must be greater than zero.'; return; } // Calculate total monthly obligations relevant to mortgage DTI var totalObligations = nonHousingDebt + futureHousing; // Calculate DTI percentage var dtiRatio = (totalObligations / income) * 100; // Determine status message based on typical lender criteria var statusMessage = ""; var statusColor = ""; if (dtiRatio <= 36) { statusMessage = "Excellent. This ratio is viewed very favorably by most conservative lenders."; statusColor = "#28a745"; // Green } else if (dtiRatio <= 43) { statusMessage = "Good. You likely fall within the limits for a standard Qualified Mortgage."; statusColor = "#856404"; // Dark Yellow/Gold } else if (dtiRatio <= 50) { statusMessage = "Caution. You may still qualify for certain loans (like FHA), but lenders may require compensating factors (e.g., high credit score, large cash reserves)."; statusColor = "#fd7e14"; // Orange } else { statusMessage = "High Risk. Most lenders will find it difficult to approve a mortgage at this ratio without significant changes to income or debt."; statusColor = "#dc3545"; // Red } // Format and display the results resultDiv.style.display = 'block'; resultDiv.innerHTML = '

Results Summary

' + 'Your Back-End DTI Ratio: ' + dtiRatio.toFixed(1) + '%' + 'Lender View: ' + statusMessage + " + '

---

' + 'Total Monthly Income: $' + income.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + " + 'Total Monthly Obligations (Debts + New Housing): $' + totalObligations.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + " + '*This calculator provides an estimate. Final approval depends on credit score, loan type, assets, and lender-specific guidelines.'; }

Understanding Your Debt-to-Income (DTI) Ratio for Mortgage Approval

When you apply for a mortgage, lenders look at several key financial metrics to determine your ability to repay the loan. While your credit score shows your history of managing debt, your Debt-to-Income (DTI) ratio demonstrates your current capacity to take on new debt.

It is one of the most critical factors in the mortgage underwriting process.

What is the DTI Ratio?

Your DTI ratio is the percentage of your gross monthly income that goes toward paying your monthly debts. "Gross monthly income" is your income before taxes and other deductions.

Lenders primarily look at two types of DTI ratios:

• Front-End Ratio (Housing Ratio): This only calculates the percentage of your income that goes toward your proposed housing costs (Principal, Interest, Taxes, and Insurance, or PITI).
• Back-End Ratio (Total Debt Ratio): This is the most important number. It includes your proposed housing costs plus all other monthly debt payments, such as car loans, student loans, credit card minimum payments, and alimony or child support.

The calculator above specifically calculates your Back-End Ratio, as this is the figure most heavily weighed by underwriters.

Why Does DTI Matter?

Lenders use DTI to assess risk. A lower DTI suggests that you have sufficient income remaining after paying your bills to handle unexpected expenses. A high DTI suggests that you are overleveraged, increasing the risk that you might default on your mortgage if you face a financial hardship.

For example, if your gross monthly income is $6,000, your non-housing debts are $800, and your estimated new mortgage payment is $1,800, your total monthly obligations are $2,600.

The calculation would be: ($2,600 / $6,000) x 100 = 43.3% DTI.

What is a Good DTI for a Mortgage?

Different loan programs have different DTI requirements, but here are general benchmarks:

• 36% or lower: This is considered ideal by most lenders and suggests manageable debt levels.
• 43%: This is generally the maximum DTI ratio allowed for a "Qualified Mortgage" (QM) under conventional loan guidelines. While you can sometimes go higher, 43% is a common hard ceiling for standard approval.
• Up to 50% (sometimes higher): Certain government-backed loans, such as FHA loans or VA loans, offer more flexibility. They may approve ratios up to 50% or slightly more, provided the borrower has "compensating factors" like a high credit score or significant cash reserves.

How to Lower Your DTI

If your DTI is higher than the recommended thresholds, you may face higher interest rates or loan denial. To improve your ratio before applying:

1. Pay down existing debt: Focus on aggressively paying off credit cards or smaller installment loans to eliminate those monthly obligations.
2. Increase your income: Documented increases in salary, bonuses, or taking on a second job can lower your ratio.
3. Reduce the target loan amount: Shopping for a less expensive home or making a larger down payment will lower your projected monthly housing payment (PITI), thus lowering your DTI.