Find out how much you can afford to borrow based on your income and existing debts.
Understanding Debt-to-Income Ratio
Lenders use your DTI ratio — total monthly debts divided by gross monthly income — to determine how much you can borrow. Lower DTI means less risk and better loan terms.
28% or less: Conservative — easy to qualify, best rates
36%: Standard threshold for most conventional loans
43%: Maximum for qualified mortgages (FHA allows up to 50% with compensating factors)
50%+: Very few lenders will approve — high risk of payment difficulty
Frequently Asked Questions
Most conventional lenders prefer a DTI below 36%, though many will approve up to 43%. FHA loans may allow up to 50% with compensating factors like a high credit score or large down payment. The lower your DTI, the better your rates and approval odds.
Generally no. Just because you qualify for a certain amount doesn't mean it's comfortable to pay. Budget for emergencies, savings, and lifestyle costs. A good rule: keep total housing costs under 28% of gross income for mortgages, and keep total debts under 36%.
Lenders use gross (pre-tax) income for DTI calculations, which is what this calculator uses. However, your actual budget is based on net (take-home) income. When planning, check that the payment is comfortable against your take-home pay, not just your gross income.