What to enter
Enter gross monthly income, which is pay before taxes and deductions. If you're paid hourly, multiply the rate by weekly hours, then by 52, then divide by 12.
Enter the full house payment you're considering: principal, interest, taxes, insurance, mortgage insurance and HOA. If you don't have one yet, the mortgage payment calculator builds it for any price.
List your monthly debts as they appear on your credit report: car loans, card minimum payments, student loans, personal loans, child support and alimony. Leave out the rent you'll stop paying, utilities, phone, insurance and subscriptions.
Front-end and back-end, by program
There are two ratios, and every program checks both.
Front-end DTI = house payment ÷ gross monthly income
Back-end DTI = (house payment + other monthly debts) ÷ gross monthly income
| Program | Front-end limit | Back-end limit |
|---|---|---|
| FHA (automated approval) | 46.9% | 56.9% |
| Conventional | none set | 50% |
| VA | none set | 41% guideline; residual income decides |
| USDA | 29% | 41% |
The calculator also flips the math around. For each program it finds the largest house payment that passes both limits with your debts: the lower of (income × front-end limit) and (income × back-end limit − debts).
A few counting rules
A card with no minimum payment showing gets counted at 5% of the balance in QualRate's model. An installment loan with ten or fewer payments left can usually be left out; FHA adds that those payments must total 5% of income or less. Student loans have their own rules by program, covered in the student loan DTI calculator.
VA works differently above 41%. It looks at residual income, the cash left each month after the house payment, debts, estimated taxes and a set amount for family living costs. Above 41%, VA wants residual income at least 20% higher than its table requires.
$6,000 a month with $700 in debts
A buyer earns $6,000 a month, has a $450 car payment and $250 in card minimums, and is looking at a $2,100 house payment.
Front-end DTI is $2,100 ÷ $6,000 = 35.0%. Back-end DTI is $2,800 ÷ $6,000 = 46.7%.
| Program | Largest house payment allowed | $2,100 payment |
|---|---|---|
| FHA | $2,714 (56.9% less $700) | Passes |
| Conventional | $2,300 (50% less $700) | Passes |
| VA | $1,760 at the 41% guideline | Needs 20% extra residual income |
| USDA | $1,740 (29% front-end) | Over the standard ratios |
FHA leaves $614 a month of room above the $2,100 payment. That room is roughly $88,000 of extra price at 5.75%. Conventional leaves $200.
Making room when a ratio runs high
If the back-end ratio is your limit, paying off the debt with the highest payment per dollar owed opens the most room. The main affordability calculator ranks your debts that way. A $250 card minimum on a $5,000 balance frees $50 a month for every $1,000 paid, while a car payment usually frees less.
If the front-end ratio is the limit, more income is the fix, and a co-signer is the fastest way to add it. Run the co-signer calculator to see how a parent's or grandparent's income changes both ratios.
To check the debts you entered against your actual credit report, call AAA Capital Funding at 888-601-8344 and we'll go through them line by line with you.