Debt/Income Ratio

The ratio of debt to income is a tool lenders use to determine how much of your income is available for your monthly mortgage payment after all your other monthly debt obligations are met.


About the qualifying ratio

In general, conventional mortgage loans require a qualifying ratio of 28/36. FHA loans are a little less restrictive, requiring a 29/41 ratio.

The first number in a qualifying ratio is the maximum percentage of your gross monthly income that can be spent on housing (including loan principal and interest, PMI, homeowner's insurance, property tax, and homeowners' association dues).

The second number is the maximum percentage of your gross monthly income that should be spent on housing costs and recurring debt. Recurring debt includes payments on credit cards, vehicle payments, child support, et cetera.

Some example data:

28/36 (Conventional)

  • Gross monthly income of $4,500 x .28 = $1,260 can be applied to housing
  • Gross monthly income of $4,500 x .36 = $1,620 can be applied to recurring debt plus housing expenses

With a 29/41 (FHA) qualifying ratio

  • Gross monthly income of $4,500 x .29 = $1,305 can be applied to housing
  • Gross monthly income of $4,500 x .41 = $1,845 can be applied to recurring debt plus housing expenses


If you'd like to calculate pre-qualification numbers with your own financial data, we offer a Loan Pre-Qualifying Calculator.

Don't forget these ratios are just guidelines. We will be happy to go over pre-qualification to help you determine how large a mortgage you can afford. Metro Mortgage can answer questions about these ratios and many others. Call us at 866-300-1550. Want to get started? Apply Here.

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