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Example data table
| Scenario | Income | Housing | Other Debts | Back-end DTI | Typical Result |
|---|---|---|---|---|---|
| Stable borrower | $7,000 | $1,750 | $650 | 34.29% | Often eligible |
| High housing cost | $6,500 | $2,400 | $700 | 47.69% | Often over limit |
| Debt-heavy profile | $5,800 | $1,600 | $1,200 | 48.28% | Needs reduction |
Formula used
How to use this calculator
- Enter total gross monthly income, including verified recurring sources.
- Add your current housing payment and an estimated new payment.
- Select whether the new payment replaces or adds to your current one.
- Fill in all recurring monthly debts using minimum required payments.
- Pick a guideline program or choose custom limits.
- Click Check Eligibility to see ratios and recommended targets.
- Use the download buttons to export your latest results.
DTI as a capacity signal
Lenders compare recurring obligations with gross monthly income to estimate payment capacity. A borrower earning $6,500 with $2,200 buffered debts produces a 33.85% back-end ratio. Small changes matter: adding $150 in minimum payments raises the ratio by 2.31 percentage points at the same income. Lower DTI can reduce rates too.
Front-end and back-end roles
Front-end DTI isolates housing, while back-end DTI includes housing plus all other debts. With $7,000 qualifying income, a $1,900 housing payment equals 27.14% front-end. If other debts total $650, the back-end ratio becomes 36.43%. This split helps you decide whether to shop for a lower payment or focus on paying down revolving and installment obligations. Monitoring both ratios helps prioritize your next financial move.
Sensitivity to buffers and variable income
The debt buffer models underwriting conservatism by increasing obligations by a fixed percent. A 5% buffer on $2,600 total monthly debts adds $130, which can move a borderline file above a guideline. Income haircuts act similarly: trimming income by 10% raises a 40% back-end ratio to 44.44% without changing payments. Use these toggles for stress testing. Test 0%, 5%, and 10% to gauge risk quickly.
Actionable improvement targets
DTI improves fastest when you reduce required payments, not just balances. Paying off a card that removes a $60 minimum can be more impactful than reducing a $5,000 balance that keeps the same minimum. Refinancing a vehicle from $420 to $320 lowers back-end DTI by 1.54 points on $6,500 income. Increasing verified income by $500 lowers the same ratio by 2.86 points. Aim for 2–3 points of cushion before applying formally.
Using the maximum housing payment output
The calculator estimates a recommended maximum housing payment by combining your other debts with the selected guideline. If your limit is 36% and qualifying income is $6,300, total allowable debts are about $2,268. Subtract $700 in other debts and you have roughly $1,568 for housing. If you can buy down the rate or taxes to reach that payment, eligibility improves immediately. Use it to set price limits during home shopping.
FAQs
What counts as monthly debt here?
Include recurring minimum payments: housing, auto, student, card minimums, installment loans, support obligations, and required monthly payments shown on underwriting documents. Exclude utilities and discretionary spending unless a lender requires them.
Should I enter balances or payments?
Use the required monthly payment, not the balance. For credit cards, enter the minimum due shown on statements. If a loan is deferred, use the payment a lender will count, or add a conservative estimate.
Why is front-end DTI shown as N/A?
Some guideline views focus only on total debt. If you choose a program with no front-end test, the calculator reports back-end DTI and uses it to estimate a recommended housing payment.
How do income adjustments affect eligibility?
The income adjustment reduces qualifying income to reflect variable earnings. A 10% haircut on $7,000 drops income to $6,300, raising every DTI ratio by about 11% relative to the original denominator.
What does the debt buffer do?
The buffer stress-tests obligations by inflating housing and other debts. For example, a 5% buffer on $2,500 total debts becomes $2,625, increasing back-end DTI and lowering the maximum affordable housing payment.
Is an “Eligible” result a guarantee?
No. Approval depends on verified income, credit, assets, property details, and lender overlays. Treat this as a screening tool to plan payment targets and to compare scenarios before applying.