People type this into search every day: what is a good debt to income ratio.
The usual answer is 36%, or 43%, or “as low as you can.” Those are lender shortcuts. They are not a budget.
The Consumer Financial Protection Bureau’s DTI explainer says your debt-to-income ratio is all your monthly debt payments divided by your gross monthly income. Gross means before tax. Different loan products and lenders set different limits.
A good DTI is one a specific lender will accept and one the rest of the month can still survive. Those are two tests.
How the CFPB does the division
Their example is small enough to do by hand.
Mortgage: $1,500
Auto loan: $100
Other debts: $400
Monthly debt: 1500 + 100 + 400 = $2,000
Gross monthly income: $6,000
2000 ÷ 6000 = 33%
That is the CFPB’s own rounding. They write 33 percent.
The debt-to-income ratio calculator uses the same split:
(housing debt + other debt) ÷ gross monthly income × 100
Housing debt is the mortgage, rent that a lender counts, or the housing payment on the application. Other debt is auto loans, cards, student loans, and any other required monthly debt. Groceries do not go in. Child care does not go in unless a lender told you to include it.
Put the CFPB numbers into the calculator as $1,500 housing and $500 other on $6,000 gross. The result is 33.3%. Monthly debt payments: $2,000.00. Income after listed debt: $4,000.00.
The one-decimal difference is formatting. The division is the same.
What the site defaults look like
Here are the calculator defaults:
- gross monthly income: $6,500
- housing debt payment: $1,800
- other debt payments: $650
Monthly debt: 1800 + 650 = $2,450
DTI: 2450 ÷ 6500 = 37.7%
Income after listed debt: $4,050.00
Calculator result
Debt-to-income ratio
- Gross monthly income
- $6,500.00
- Housing debt payment
- $1,800.00
- Other debt payments
- $650.00
37.7%
debt-to-income ratio
- Monthly debt payments
- $2,450.00
- Income after listed debt
- $4,050.00
Fig 1 · 1/2
Default DTI stack
$6,500 gross. This is a planning ratio, not an approval.
Housing
$1,800
Other debt
$650
Housing debt is $1,800, 27.7% of gross on its own.
Add $650 of other debt and the ratio is 37.7%.
27.7% is 1800 ÷ 6500. People call that the front-end or housing ratio. The calculator publishes the back-end number, housing plus other debt. I would look at both. A 27.7% housing slice with almost no other debt is a different month from 27.7% housing plus a pile of cards.
43% is a line people still search
The CFPB page title still names 43%. That figure was the old general Qualified Mortgage DTI cap. The current CFPB Qualified Mortgage explainer, last reviewed January 2, 2025, does not keep a 43% cap as the QM test. It uses a limit on the loan’s APR and still requires the lender to consider DTI or residual income.
So 43% is not a law that says you cannot borrow. It is still a useful planning line, because people and some overlays still talk in that unit.
43% of $6,500 is $2,795.
Keep housing at $1,800 and raise other debt to $995. The calculator prints 43%. Monthly debt: $2,795.00. Income after listed debt: $3,705.00.
Calculator result
Debt-to-income ratio
- Other debt payments
- $995.00
43%
debt-to-income ratio
- Monthly debt payments
- $2,795.00
- Income after listed debt
- $3,705.00
Or put the whole $2,795 in housing and leave other debt at $0. Same 43%. Same $3,705 left on paper. The grocery week is not the same. One household has a house payment. The other has a house payment plus almost $1,000 of other bills.
Fig 2 · 1/3
Three DTI readings
Same $6,500 gross, three debt stacks
Debt ÷ gross
24.8%
$1,610
37.7%
$2,450
43%
$2,795
A renter-style stack of $1,260 housing and $350 other debt is 24.8%.
The calculator defaults land at 37.7%.
Debt of $2,795 is 43% of $6,500.
36% of $6,500 is $2,340. That is $110 under the default $2,450. Drop other debt from $650 to $400 and the calculator prints 33.8%. Monthly debt: $2,200. Income after listed debt: $4,300.
I would not call 33.8% “good” and 37.7% “bad.” I would call 33.8% a month with $250 more slack than the default.
Fig 3 · 1/1
DTI as other debt rises
$6,500 gross and $1,800 housing, then add other debt
Debt-to-income
- DTI
| Point | DTI |
|---|---|
| $0 | 27.7% |
| $250 | 31.5% |
| $400 | 33.8% |
| $650 | 37.7% |
| $995 | 43% |
| $1,200 | 46.2% |
With no other debt, DTI is 27.7%.
At $650 other debt it is 37.7%. At $995 it hits the 43% line.
Put a real mortgage payment in the housing box
The mortgage payment calculator default is a $420,000 price, $84,000 down, 6.25%, 30 years. Principal and interest: $2,068.81. The walkthrough is in how a mortgage payment is calculated.
Swap that $2,068.81 into housing. Keep $650 other debt and $6,500 gross.
DTI: 41.8%
Monthly debt: $2,718.81
Income after listed debt: $3,781.19
Freddie Mac’s Primary Mortgage Market Survey for the week of October 8, 2026 puts the 30-year fixed average at 7.40%. Same $336,000 loan at 7.40% is $2,326.40 a month.
Housing $2,326.40 plus $650 other debt on $6,500 gross: 45.8%. Monthly debt: $2,976.40. Income after listed debt: $3,523.60.
The rate change is 1.15 points. The DTI change is 4.0 points. That is why a quote can move you across a lender overlay without any new car.
A 15-year term on the same $336,000 at 6.25% is $2,880.94. I am not going to pretend that fits the $6,500 gross next to $650 of other debt. 2880.94 + 650 = 3530.94, and 3530.94 ÷ 6500 = 54.3% if you run the same division. The calculator will print that if you type it. A 15-year payment is a cash-flow choice, not a DTI trick.
Fig 4 · 1/1
Housing payment on $6,500
$650 of other debt stays put. Only the housing line changes.
- DTI %
| Category | DTI % |
|---|---|
| $1,800 | 37.7% |
| $2,069 | 41.8% |
| $2,326 | 45.8% |
The $1,800 default housing line is 37.7% DTI with $650 other debt.
The 6.25% mortgage payment is 41.8%. At 7.40% it is 45.8%.
Gross income is the denominator. Take-home is the month.
DTI uses gross pay because that is how most applications are written. Your rent and your cards leave the checking account.
The rent affordability calculator subtracts debts, essentials, and saving from take-home pay, then also computes 30% of that take-home figure. It keeps the lower number. The full writeup is how much rent can I afford.
Site defaults there: $4,200 take-home, $350 debts, $1,200 essentials, $600 saving. Conservative rent: $1,260.
Calculator result
Rent affordability
- Monthly take-home income
- $4,200.00
- Monthly debt payments
- $350.00
- Other essential spending
- $1,200.00
- Monthly savings target
- $600.00
$1,260.00
conservative monthly rent
- Cash-flow ceiling
- $2,050.00
- 30% reference
- $1,260.00
- Amount left after suggested rent
- $1,390.00
Put that renter stack on the DTI tool as $1,260 housing and $350 other on $6,500 gross. Result: 24.8%. Monthly debt: $1,610. Income after listed debt: $4,890.
24.8% looks comfortable on an application. The rent tool still capped this household at $1,260 because 30% of take-home was tighter than leftover cash. A low DTI did not invent extra take-home pay.
Raise take-home style income in the rent tool to $6,500, debts $650, essentials $1,600, saving $700. Conservative rent: $1,950. Cash-flow ceiling: $3,550. 30% reference: $1,950.
Same person, two units. DTI on $1,800 + $650 is 37.7%. The rent ceiling on take-home assumptions is $1,950. If the listing is $2,200, DTI can still look “fine” while the rent tool already said no.
More income lowers the ratio without touching the debts
Keep $1,800 housing and $650 other. Raise gross income from $6,500 to $8,000.
DTI: 30.6%
Monthly debt is still $2,450
Income after listed debt: $5,550
The debts did not get cheaper. The denominator grew. Lenders like that. The grocery week only improves if the extra gross pay becomes extra take-home pay after tax.
A bonus you cannot repeat does not belong in the income box. The calculator assumptions say only recurring contractual debt goes in the debt boxes. Use the income a lender is likely to count, not the best invoice.
What belongs in “other debt”
The CFPB example put an auto loan and “the rest of your debts” next to the mortgage. That is the right idea.
Include:
- minimum card payments
- auto loans
- student loans
- personal loans
- child support or other required monthly debt the lender asked for
Leave out:
- utilities
- food
- subscriptions, unless they are a contractual loan
- a gym you would cancel
The credit card payoff post, how long will it take to pay off my credit card, uses a $6,200 balance at 21.9% and a $250 payment. That $250 is the “other debt” line if this is your only extra account. Add it to $1,800 housing on $6,500 gross and DTI is 2050 ÷ 6500 = 31.5%.
Pay $350 instead and the ratio ticks up to 2150 ÷ 6500 = 33.1% while the card dies a year sooner. A higher DTI this year can be the cheaper path. The ratio does not know that.
If you are choosing an order across two debts, use debt snowball vs avalanche. DTI only sees the payment you send, not the APR queue.
Buying a house uses DTI and a second comparison
Should I rent or buy this house runs costs over a stay. DTI runs the payment against income. You can win one and lose the other.
A $2,068.81 payment on $6,500 gross with $650 other debt is 41.8% DTI. The rent vs buy defaults still say renting costs $45,341.72 less over five years at $2,200 rent. Neither number is a personality test. One is an underwriting ratio. One is a five-year cost stack that ignores home-price change.
Open the debt-to-income ratio calculator with the gross monthly income on your pay stub, the housing payment on the application, and the minimums you actually send. If you are comparing a new mortgage, put the principal and interest from the Loan Estimate in the housing box, then add tax and insurance if the lender will count them.
The note under the result is the right one. This planning ratio is not a lender approval decision.