Do credit-card balances count or just minimums?

Just the minimum payment shown on the statement, but the balance itself counts toward credit utilization, which hits your score and may lower the mortgage rate offered.

Are utilities or groceries in DTI?

No. DTI only counts debt obligations and housing (mortgage principal, interest, taxes, insurance, HOA). Living expenses are evaluated separately in some manual underwrites, but not in the ratio.

Can I qualify for an FHA loan with 50% DTI?

Sometimes, with compensating factors (high credit score, large reserves, low housing payment relative to gross income). FHA technically allows up to 56.99% in certain manual underwrites but lenders rarely go above 50%.

Answer · Debt & Taxes

What is a good debt-to-income (DTI) ratio?

By Yinka Olayokun Published May 12, 2026 Reviewed May 12, 2026

Direct Answer

Lenders consider a back-end DTI (all monthly debt payments ÷ gross monthly income) under 36% strong, 36–43% acceptable, and above 43% risky. Mortgage qualifying caps usually sit at 43–50%. For personal financial health, target a total DTI under 30% with no more than 28% going to housing alone, the classic 28/36 rule.

DTI thresholds by lender / purpose

DTI level	Status
Under 28%	Excellent, qualifies for top rates
28–36%	Healthy, most lenders comfortable
36–43%	Stretched, conventional limit usually here
43–50%	Risky, FHA may still approve
Over 50%	Most lenders decline

Front-end vs back-end DTI

Front-end DTI = housing payment ÷ gross income (cap usually 28%). Back-end DTI = ALL debt payments (housing + car + student + credit-card minimums + child support) ÷ gross income (cap usually 36–43%). Both matter; mortgages look at both.

How to improve DTI fast

Two levers: lower the numerator or raise the denominator. Pay off the smallest installment loan first (drops the monthly payment off the calculation entirely); avoid taking new financing in the 6 months before a mortgage application; ask for a raise or document side income.

Frequently Asked Questions

Do credit-card balances count or just minimums?: Just the minimum payment shown on the statement, but the balance itself counts toward credit utilization, which hits your score and may lower the mortgage rate offered.
Are utilities or groceries in DTI?: No. DTI only counts debt obligations and housing (mortgage principal, interest, taxes, insurance, HOA). Living expenses are evaluated separately in some manual underwrites, but not in the ratio.
Can I qualify for an FHA loan with 50% DTI?: Sometimes, with compensating factors (high credit score, large reserves, low housing payment relative to gross income). FHA technically allows up to 56.99% in certain manual underwrites but lenders rarely go above 50%.

Sources

What is a debt-to-income ratio? , Consumer Financial Protection Bureau. Verified May 1, 2026.

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