Do utility bills count as debt?

No. DTI counts contractual repayment obligations, not variable living expenses.

What DTI do I need for a mortgage?

Many conventional loans want ≤43–45%; strong compensating factors (big reserves, high credit score) can stretch to ~50% on some programs.

Should I use take-home pay instead?

Lenders use gross income, so this matches their math. For personal budgeting, tracking against take-home pay is stricter and arguably wiser.

Finance

Debt-to-Income Ratio Calculator

What this does

Measure what share of gross monthly income goes to debt payments, and see how lenders read the result.

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Good to know

Front-end versus back-end

Mortgage underwriters also compute a front-end ratio using housing costs alone (traditionally capped near 28%). This tool computes the broader back-end number, since it drives most approvals.

Improving your DTI

Only two levers exist: lower required payments (pay down debt, refinance, extend terms) or raise verified income. Paying off a card entirely helps more than spreading the same dollars thinner.

How it's calculated

The math behind this calculator

DTI = monthly debt payments / gross monthly income

Add up required monthly payments; rent or mortgage, car loans, student loans, credit card minimums, other obligations; and divide by pre-tax monthly income. Lenders call this the back-end ratio and lean on it heavily for mortgage approval.

Assumptions & limitations

Uses gross (pre-tax) income, matching lender convention.
Includes required payments only, not discretionary spending.
Common thresholds: ≤36% healthy, 37–43% acceptable, >43% high-risk for most mortgages.

Worked example

Paying $1,850 toward debts on $6,000 gross income is a DTI of about 30.8%; comfortably inside the range most lenders prefer.

FAQ

Frequently asked questions

Do utility bills count as debt?: No. DTI counts contractual repayment obligations, not variable living expenses.
What DTI do I need for a mortgage?: Many conventional loans want ≤43–45%; strong compensating factors (big reserves, high credit score) can stretch to ~50% on some programs.
Should I use take-home pay instead?: Lenders use gross income, so this matches their math. For personal budgeting, tracking against take-home pay is stricter and arguably wiser.

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