What Is a Good Debt-to-Income Ratio? (DTI) – Calculator & Guide
Your Debt-to-Income (DTI) ratio is one of the most important numbers lenders look at when approving loans or mortgages. It tells them how much of your income goes toward debt payments—and whether you're a low-risk or high-risk borrower.
📊 Use Our Debt-to-Income Ratio Calculator
Enter your monthly debt and gross income below to instantly calculate your DTI ratio:
✅ What Is a Good DTI Ratio?
| DTI Ratio | Status | Implication |
|---|---|---|
| 0% - 20% | Excellent | Very strong financial position |
| 21% - 35% | Good | Acceptable for most lenders |
| 36% - 43% | Fair | May need further assessment |
| Over 43% | High | Likely to be rejected for loans |
💬 Why Does DTI Matter?
A lower DTI ratio shows lenders that you're not overburdened by debt and are more likely to repay new obligations. It's a key factor in:
- Mortgage approvals
- Credit card limit increases
- Car loans
- Personal loans
📉 How to Improve Your DTI
- Pay down high-interest debts
- Avoid new credit obligations
- Increase your income (e.g. side hustle)
- Consolidate debt at lower interest rates
❓ Frequently Asked Questions
What is the ideal DTI ratio for a mortgage?
Lenders usually prefer a DTI below 36%, but some may accept up to 43%.
Does rent count in DTI ratio?
No. DTI typically considers only debts—like loans and credit card minimums—not living expenses like rent or utilities.
Is a lower DTI always better?
Generally yes, but if your DTI is too low, it might also suggest underutilization of credit, which affects your credit profile differently.
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