Debt-to-Income Ratio for Mortgages
By Jason Iacovelli, NMLS #3370 | Updated December 2025
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What is a good debt-to-income ratio for a mortgage?
A good DTI ratio is 43% or lower for conventional loans. FHA loans allow up to 50% with compensating factors. Calculate DTI by dividing your total monthly debt payments by your gross monthly income. For example: $2,200 debt ÷ $6,000 income = 36.7% DTI. Lower your DTI by paying off debt, increasing income, or making a larger down payment.
Key Takeaways
- Good DTI ratio: 43% or lower (FHA allows up to 50%)
- Calculate: Total monthly debt ÷ gross monthly income × 100
- Includes: mortgage, car loans, student loans, credit cards, child support
- Excludes: utilities, groceries, insurance
- Improve DTI: pay off debt, increase income, larger down payment
Debt-to-income (DTI) ratio is your total monthly debt divided by gross monthly income. Most lenders require 43% or lower for conventional loans, while FHA loans allow up to 50%.
How to Calculate DTI
Example Calculation:
Monthly Income: $6,000
Monthly Debts:
- - Proposed mortgage: $1,500
- - Car loan: $400
- - Student loan: $200
- - Credit cards: $100
- Total: $2,200
DTI = $2,200 ÷ $6,000 = 36.7%
DTI Requirements by Loan Type
- Conventional: 43% max (50% with strong credit)
- FHA: 50% max (with compensating factors)
- VA: 41% preferred, flexible with residual income
- USDA: 41% max
- Jumbo: 43% max (stricter requirements)
How to Improve Your DTI
Pay off credit cards and small loans, increase income through raises or side work, avoid new debt before applying, or make larger down payment to reduce mortgage amount.
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Jason Iacovelli
Licensed Mortgage Broker
Jason Iacovelli is a licensed mortgage broker serving the Raleigh-Durham Triangle area. Jason helps buyers understand and optimize their debt-to-income ratio to qualify for the best mortgage terms.
Last reviewed and updated: December 31, 2025
Frequently Asked Questions About DTI
Understanding debt-to-income ratio for mortgages