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Debt-to-Income Ratio Mortgage Calculator

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Use our Debt-to-Income Ratio Mortgage Calculator to determine what size mortgage you qualify for based on your gross income, debt expense and debt-to-income ratio.  This calculator enables borrowers to understand how lenders view your financial profile when you apply for a mortgage.  Lenders apply a ratio of your debt expenses -- your mortgage payment, property tax and hazard insurance plus payments for credit card, auto and student loans -- to your monthly gross income to determine the loan you qualify for.
Lenders only permit you to spend so much of your gross income on monthly debt payments, including your mortgage, and our calculator shows you the home loan amount you can afford using this ratio.  Given how a debt-to-income ratio is calculated, the lower your non-housing related debt expenses, the more money you can spend on your mortgage and the higher the loan amount you qualify for. This is why it can be helpful to pay off or pay down your debt balances before you apply for a home loan.  Our calculator also factors in your estimated property tax and homeowners insurance expenses which are included in the debt figure when lenders calculate your debt-to-income ratio. 
This calculator includes other inputs that impact the loan you qualify for including your interest rate, mortgage term, loan type and if you are required to pay monthly co-op or HOA fees.  Co-op and HOA fees are also considered debt payments which means they reduce how much you can spend on your mortgage and what size loan you can afford.  We recommend that you use our Debt-to-Income Ratio Calculator to see how the debt-to-income ratio produces different results for estimated loan amount, mortgage payment and total monthly housing expense based on different scenarios.  We also offer a version of this calculator that does not require personal information.


Please provide Monthly GROSS Income

When you provide valid personal info we may connect you with lenders which enables you to compare mortgage proposals and find the mortgage that is right for you. Click here for a version of this calculator that does not require personal info
Includes estimated property tax and insurance. Property tax and insurance rates vary by state, county and property
Lender guidelines typically allow you to spend a maximum of 50% of your GROSS monthly income on your combined monthly housing expense and other monthly debt such as credit card, auto and student loans
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Points  More Info:
Points: Fees you are willing to pay in order to get a lower interest rate. The number of points refers to the percentage of the loan amount that you would pay. For example, "2 points" means a charge of 2% of the loan amount.
Total Lender Fees:  
Loan type:  
Property Value:  
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Monthly Housing Payments
P & I More Info
Principal & Interest: A periodic payment, usually paid monthly, that includes the interest charges for the period plus an amount applied to the reduction of the principal balance.
Mortgage Insurance More Info
Mortgage Insurance: The monthly cost for a policy that protects the lender in case you’re unable to repay the full amount of the loan. It is typically required for loans that have a loan-to-value ratio between 80% to 100%.
Property Tax More Info
Property Tax: (Also called "Real Estate Tax.") Property taxes are government assessments on real estate property. With mortgage financing, the local, county or state tax assessment on real estate property is considered part of the monthly housing obligation and typically collected and set aside by the lender ...
Homeowner Insurance More Info
Homeowner Insurance: or also commonly called hazard insurance, is the type of property insurance that covers private homes. It is an insurance policy that combines various personal insurance protections, which can include losses occurring to one’s home, its contents, loss of its use, or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home or at the hands of the homeowner within the policy territory.lender ...
Homeowner Association Fee More Info
Homeowner Association fee: (HOA) fees are funds that are collected from homeowners in a condominium complex to obtain the income needed to pay (typically) for master insurance, exterior and interior (as appropriate) maintenance, landscaping, water, sewer, and garbage costs.
(If Any)
Total Monthly Housing Payments
Lender Fees
Points More Info
Points Fees you are willing to pay in order to get a lower interest rate. The number of points refers to the percentage of the loan amount that you would pay. For example, "2 points" means a charge of 2% of the loan amount.
Origination Fee More Info
Origination Charge: A loan origination charge is a fee charged by the lender for evaluating, processing, and closing the loan.
Credit Report Fee More Info
Credit Report Fee: Fee charged to obtain an applicant’s credit history prepared by one or all of the three major credit bureaus. Used by lender to determine the borrower’s creditworthiness.
Tax Service Fee More Info
Tax Service Fee: A fee charged by the lender to cover the cost of retaining a tax service agency. These agencies monitor the property tax payments on the property and report the results to the lender.
Processing Fee More Info
Processing Fee: A processing fee is a charge by the lender for clerical items associated with the loan. Examples of processing include loan set up, organization of loan conditions for underwriting, and preparing required disclosures for the borrower.
Underwriting Fee More Info
Underwriting Fee: A fee charged by the lender to verify information on the loan application, authenticate the property’s value, and perform a risk analysis on the overall loan package.
Wire Transfer Fee More Info
Wire Transfer Fee: In most cases lenders wire funds to escrow companies to fund a loan. Commercial banks that perform this function will charge the lender so the fee is generally passed on to the borrower.
(If Any)
FHA Upfront Premium More Info
FHA Upfront Premium: A fee paid in cash at the close of escrow or more commonly it is financed into the loan. These premiums are pooled together by the FHA and are used to insure the risk of borrower default on FHA loans. FHA upfront premiums are prorated over a five year period, meaning should the homeowner refinance or sell during the first five years of the loan, they are entitled to a partial refund of the FHA upfront premium paid at loan inception.
(If any)
VA funding Fee (If any)
Flood Fee
Other Fees More Info

Other fees could be either additional Administrative Fees that a lender charges or it could be a Flat Fee to cover all lender charges such as: (Origination Fees, Points, Underwriting and Processing Fees, Credit Reports and Tax Service Fees)

The flat fee does not include prepaid items and third party costs such as appraisal fees, recording fees, prepaid interest, property & transfer taxes, homeowners insurance, borrower’s attorney’s fees, private mortgage insurance premiums (if applicable), survey costs, title insurance and related services.

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*Actual rates and other information may vary. Sponsored results shown only include participating lenders. The information you enter on this page will only be shared with lenders you choose to contact, either by calling the phone number or requesting a quote.
Current Mortgage Rates as of December 13, 2018
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Data provided by Informa Research Services. Payments do not include amounts for taxes and insurance premiums. Click here for more information on rates and product details.
While we pride ourselves on the quality and breadth of the FREEandCLEAR mortgage calculators please note that they should be used for informational purposes only. Our calculators rely on assumptions by us and inputs and assumptions provided by you, which may be inaccurate. The outputs from our calculators are estimates only and should not be used as the sole basis for making any financial decisions. Always consult multiple financial professionals when determining the mortgage size and program that is appropriate for you.

How Lenders Qualify You for a Mortgage


Borrower Debt-to-Income Ratio

Lenders use your debt-to-income ratio to determine what size mortgage you qualify for.  Your debt-to-income ratio represents the maximum amount of your monthly gross income that you can spend on total monthly housing expense (mortgage payment plus property tax, homeowners insurance and other applicable housing expenses) plus monthly debt payments such as car, student and credit card loans.  Lenders usually use a maximum borrower debt-to-income ratio of 43% to 50% to determine what size mortgage you qualify for, although some lenders and mortgage programs apply higher or lower ratios.  Borrowers with lower monthly debt payments can afford to spend more on their mortgage payment which enables them to qualify for a larger mortgage. On the other hand, borrowers with high monthly debt payments may find it challenging to qualify for a mortgage even if they have a high credit score and earn a decent monthly income.  Borrowers looking to maximize their mortgage amount should pay down their debt to improve their debt-to-income ratio before they apply for a mortgage  Use our Debt-to-Income Ratio Mortgage Calculator to understand how changes in your monthly debt expense impact how much mortgage you qualify for.


Ability to Repay the Loan

In addition to applying a maximum debt-to-income ratio, lenders are also required to demonstrate that borrowers have the ability to repay the loan according to specific government guidelines.  In short, lenders determine if a loan is a Qualified Mortgage (QM) according to the guidelines, which means the borrower can afford and payback the mortgage.  The guidelines also address lender fees, maximum mortgage length and prohibit loan features such as balloon payments and negative amortization -- when your mortgage balance can increase over the life of the loan.  Interest only mortgages are also not permitted according to the Qualified Mortgage guidelines.  It is important to highlight that some lenders offer mortgages that do not satisfy the Qualified Mortgage guidelines.  These mortgages, however, usually require borrowers to pay a higher mortgage rate or impose stricter qualification requirements.      


Borrower Credit Score

Lenders review your credit score and pull your credit report when you apply for a mortgage.  Lenders typically require that borrowers have a minimum credit score of 620 although certain mortgage programs permit lower scores.  Your credit score is also one of the inputs that lenders use to determine your mortgage rate, with the higher your score, the lower your interest rate.  Lenders review your credit report to determine if you have experienced any adverse credit events in the past such as a bankruptcy, short sale or foreclosure.  If you have experienced an adverse credit event, lenders require you to wait a certain period of time before applying for a mortgage.  FREEandCLEAR recommends that borrowers review their credit score and credit report six-to-twelve months prior to applying for a mortgage to resolve any issues in your credit profile.


Borrower Employment History

Unless you are a recent college graduate, lenders typically require that borrowers have two years of continuous employment history before you apply for a mortgage.  Borrowers with a break in their employment may be required to provide a written explanation for the gap although if you have extensive work experience in the same field the gap may be less of an issue.  Additionally, if you have changed jobs recently and your new job has an initial probation period the lender may wait until the end of the probation period before approving you for a mortgage.  Lenders usually call your employer prior to your mortgage closing to verify your employment and make sure you are still working at the job you listed on your mortgage application.  It is important to highlight that military service and full-time school such as college also usually count as work history so you may not need a full two-year employment history if you recently graduated from college or served in the armed forces.


Residence History

Many lenders also consider your residence history when you apply for a mortgage.  Lenders want to understand where you have lived over the past several years so that they can confirm that you have made your mortgage or rent payments on time.  They may also want to understand the total monthly housing expense for your past residences so they can compare that to the mortgage payment, property tax and insurance for the home you want to buy.  If your mortgage payment and housing expense are expected to increase significantly compared to what you paid in the past the lender wants to make sure that your make enough money to afford the higher payment. 


Mortgage Qualification Guidelines Vary By Lender

It is important for borrowers to understand that mortgage qualification guidelines can vary by lender. While most lenders use a similar set of qualification requirements, they have some discretion in developing and applying these requirements. This is another reason why you should always contact multiple lenders when you shop for a mortgage. Lenders may use different borrower qualification requirements which means one lender may decline your loan application while another lender approves it. Although all lenders apply minimum borrower qualification standards, borrowers may need to apply to multiple lenders before being approved for their mortgage. Our calculator uses an industry standard debt-to-income ratio to determine your loan amount and monthly payment but we encourage borrowers to contact several lenders to confirm what size loan they can afford.

More FREEandCLEAR Mortgage Resources

Mortgage Guides

Borrower Debt-to-Income Ratio Overview

Understand how lenders apply debt-to-income ratios to determine what size mortgage you qualify for and how you can improve your debt-to-income ratio before you apply for a mortgage


Mortgage Rates

Compare mortgage rates and fees from top lenders near you.  Comparing proposals from multiple lenders is the best way to find the mortgage that is right for you

Ask a Mortgage Expert

Ask an Expert

Got mortgage questions? We love answering them. Submit your mortgage questions and receive an informative response within 24 hours


Mortgage Qualification Guidelines

Review our comprehensive overview of mortgage qualification requirements before you apply for a mortgage


Mortgage Lender Options

There are different types of lenders including large national banks, regional and local banks, mortgage banks, credit unions, mortgage brokers and hard money lenders. Borrowers benefit from understanding their mortgage lender options and by contact different types of lenders when they shop for a mortgage


Debt-to-income Ratio Guideline: https://www.fanniemae.com/content/guide/selling/b3/6/02.html

About the calculator developer

Michael Jensen, Mortgage and Finance Guru

Michael is the co-founder of FREEandCLEAR. Michael possesses extensive knowledge about mortgages and finance and has been writing about mortgages for nearly a decade. His work has been featured in leading national and industry publications. More about Michael

Michael Jensen LinkedInLinkedIn | Email Michael JensenEmail

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