Debt-to-Income & Credit Utilization
Are you loan-ready? DTI, credit utilization and debt service coverage in one place.
Against published limits
Sources: CFPB — What is a debt-to-income ratio? · Fannie Mae Selling Guide B3-6-02, Debt-to-Income Ratios · CFPB — How do I get and keep a good credit score?.
How this was calculated
Results are estimates for general information and planning, not financial advice. Banks and institutions may calculate differently (rounding, fees, rate changes). Confirm figures with your lender or a qualified adviser before deciding.
About the Debt-to-Income & Credit Utilization
Before you apply for a loan, see your numbers the way a lender does. Debt-to-income (DTI) is all your monthly debt payments divided by your gross monthly income: the front-end ratio counts housing alone, the back-end ratio everything. Add the payment of the loan you want and the calculator shows both ratios, the room left under your targets and how they compare with Fannie Mae’s published limits — 36% for manually underwritten mortgages (45% with strong credit and reserves) and 50% through its automated system.
Two more checks complete the picture: credit utilization — how much of your card limits you are using, per card and overall, and what to pay to get under 30% — and the debt service coverage ratio (DSCR) that lenders use for rental properties and businesses, with the largest loan a target DSCR allows.
How to use it
- Choose the currency and the check: Debt-to-income, Credit utilization or DSCR.
- For DTI, enter your gross income (a month or a year; add a co-borrower if there is one), your housing payment and each monthly debt payment. Add the payment of the loan you are applying for.
- Set the housing and total targets your lender uses, then read both ratios and the room you have left.
- For credit utilization, list each card’s balance and limit; for DSCR, enter the property’s or business’s net operating income, existing loan payments and the loan you want.
- Copy the summary or download the table.
Examples
Back-end DTI 33.3% · front-end 25% · $160 a month of room left under 36%
Back-end DTI 38.3% — over 36%, within Fannie Mae’s 45% (with strong credit and reserves) and 50% (Desktop Underwriter)
Utilization 37% overall · pay $700 to reach 30% · the second card alone is at 83.3%; closing the empty card would push overall use to 46.3%
$7,067.79 a month · DSCR 1.41 · the largest loan at a 1.25 DSCR is $1,131,895
Common uses
- Check whether a mortgage or car loan payment fits before you apply.
- Find out how much debt to pay off to get under a lender’s DTI limit.
- Lower your credit utilization the most effective way before a credit check.
- Size a loan for a rental property from its income.
What counts
- Income: gross monthly income — before tax and other deductions — of everyone on the loan.
- Housing: rent, or the full mortgage payment with property tax, insurance and HOA dues.
- Debts: the minimum monthly payment on each loan and card, plus alimony, child support and other regular obligations. Everyday bills (utilities, food, insurance premiums) are not debts.
Lenders follow their own rules for what to include: Fannie Mae, for example, counts installment debts with more than ten months left (and shorter ones that significantly affect your ability to pay), every revolving account and all leases.
Published limits
- Fannie Mae Selling Guide B3-6-02: at most 36% total DTI for manually underwritten loans, up to 45% with the credit score and reserves of its Eligibility Matrix, and at most 50% for loans underwritten through Desktop Underwriter.
- The CFPB defines DTI as all monthly debt payments divided by gross monthly income and notes that different loan products and lenders have different limits.
- In India lenders use FOIR — fixed obligations to net income — instead; the home loan eligibility calculator works with it.
The targets you set in the calculator are your own choice: ask your lender for theirs.
Credit utilization
Utilization = card balances ÷ credit limits. Scoring models look at how close you are to being “maxed out”; the CFPB says experts advise keeping your use of credit at no more than 30% of your total credit limit. Two things the calculator shows that are easy to miss: a single card can be far above 30% while the total looks fine, and closing a card removes its limit, so the same balances use more of what is left.
DSCR
DSCR = net operating income ÷ debt service. Net operating income is the rent or business income left after operating costs (maintenance, taxes, insurance, management) but before loan payments; debt service is a year’s principal and interest. A DSCR of 1.00 means the income only just covers the payments. Lenders set their own minimum; the calculator turns the one you enter into the largest monthly payment — and loan, at the rate and term you give — that keeps you there.
Limitations
- Lenders calculate DTI with their own rules for which income and debts count (variable pay, rental income, student loans in deferment); the result is an estimate from the figures you enter.
- Meeting a ratio does not guarantee approval: credit history, savings, the property and the loan type matter too.
- Utilization uses the balances and limits you enter; card issuers report balances on their own dates.
- DSCR assumes a level payment loan; interest-only periods, balloon payments and lender-specific income adjustments are not modelled.
Privacy
Everything is calculated in your browser. Your income, debts and card details are never uploaded or stored.
Frequently asked questions
How do I calculate my debt-to-income ratio?
Add up your monthly debt payments — housing, car, student and personal loans, minimum card payments and other obligations — and divide by your gross monthly income. $2,000 of payments on $6,000 of income is a DTI of 33%.
What is a good debt-to-income ratio?
Lower is better, and each lender sets its own maximum. For mortgages it sells to Fannie Mae, the published maximum is 36% for manually underwritten loans (45% with strong credit and reserves) and 50% through its Desktop Underwriter system.
What is the difference between front-end and back-end DTI?
Front-end counts only your housing payment; back-end counts housing plus every other debt payment. Both use gross monthly income.
Does rent count in debt-to-income?
Your current rent is a housing payment, so it is part of today’s ratios. When you apply for a mortgage, lenders use the new mortgage payment in its place.
How is credit utilization calculated?
Balance ÷ credit limit, for each card and for all of them together. $3,700 of balances on $10,000 of limits is 37%; paying $700 brings it to 30%.
What is DSCR and what is a good DSCR?
Debt service coverage ratio: net operating income divided by the year’s loan payments. Above 1 the income covers the payments; below 1 it does not. Lenders set their own minimum — enter yours to see the largest loan it allows.