- Debt-to-income ratio (DTI)
- Monthly debt payments divided by gross monthly income, as a percent. Lenders use it to judge whether a new payment is affordable alongside existing obligations. This calculator reports two versions: front-end, which counts housing only, and back-end, which adds all other recurring debts. Program limits vary, and lenders use verified figures.
- Back-end DTI
- Housing payment plus all other recurring monthly debt payments, divided by gross monthly income. It is the ratio lenders usually weigh most. The calculator’s assessment uses 43% as the line for most lenders, a common guideline cited by the CFPB rather than a legal cap; some programs allow higher ratios with compensating factors.
- Front-end DTI
- The monthly housing payment alone divided by gross monthly income, also called the housing ratio. It shows how much of income the home itself would take. Some loan programs set a separate front-end limit, while others focus mainly on the back-end ratio. Both use gross income, not take-home pay.
- Gross monthly income
- Total monthly income before taxes, retirement contributions and other deductions. Lenders use gross income, not take-home pay, which is why a DTI that looks acceptable can still feel tight in a monthly budget. Income that varies, such as bonuses or self-employment earnings, is often averaged over a documented history.
- PITI (housing payment)
- Principal, interest, property taxes and homeowners insurance: the full monthly housing cost lenders count, plus mortgage insurance and HOA dues where they apply. This is the figure to enter as the housing payment. Using principal and interest alone understates the ratio, sometimes by several percentage points.
- Recurring monthly debts
- Minimum required payments on debts that appear on a credit report, such as auto loans, student loans, credit cards and personal loans, plus obligations like child support. Utilities, groceries and insurance premiums are generally not counted. Lenders use the minimum payment shown on the report, not the amount you choose to pay.
- Lending assessment
- A plain-language label the calculator assigns to your back-end DTI, from well within limits to likely declined. It reflects common guidelines, not any lender’s decision. Actual approval also depends on credit history, down payment, reserves and the loan program, and lenders calculate DTI from verified income and credit-report debts.
- Total monthly debt
- The housing payment plus other monthly debt payments: the numerator of the back-end DTI. Lowering it, for example by paying off a small loan with few payments left, can move the ratio more than an equivalent increase in income would, since income is the larger number in the division.
