What Is a Good Debt to Income Ratio? The Real Benchmarks

On this page

• What a debt-to-income ratio is
• What is a good debt to income ratio for planning? The CFPB's guidelines
• How much credit card debt is too much?
• What mortgage rules use
• General Qualified Mortgages: the 43% cap is gone
• VA home loans: 41%
• USDA-backed rural home loans: 29% and 41%
• Work out your own DTI
• How to lower a high DTI
• 1. Pay down balances with a plan
• 2. Call before you fall behind
• 3. Talk to a counselor
• Bottom line
• Common questions
• Sources

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What is a good debt to income ratio? There isn't one number that works for everyone. The Consumer Financial Protection Bureau (CFPB) says different loan products and lenders will have different DTI limits. What you can use are the benchmarks published sources do give: a CFPB planning worksheet suggests homeowners consider keeping all debts at 36% or less of gross income and renters at 15% to 20% or less, and the VA and USDA home loan rules each use 41% as a total-debt line.

What a debt-to-income ratio is

The CFPB defines it this way: your DTI is all your monthly debt payments divided by your gross monthly income. Gross income is the amount you earn before taxes and other deductions come out. The CFPB calls this number one way lenders measure your ability to manage the monthly payments to repay the money you plan to borrow.

The CFPB's own example: a $1,500 mortgage, a $100 auto loan and $400 of other debts add up to $2,000 a month. Divided by $6,000 of gross monthly income, that's a DTI of 33%.

This is different from a budget. A budget, like the one in our guide to making a budget, runs on take-home pay, the money that actually reaches your account. DTI runs on gross pay, so it will look smaller than the share of your paycheck your debts really take. Keep the two numbers apart.

The CFPB's debt-to-income worksheet spells out what to count. Your total monthly debt payment includes credit card, student, auto, and other loan payments, as well as court-ordered fixed payments, like child support. Your gross monthly income includes money earned from a job and child support you receive. If your income varies, the worksheet says to estimate a typical month, and that it's better to estimate lower.

What is a good debt to income ratio for planning? The CFPB's guidelines

The closest thing to a published answer to "what is a good debt to income ratio" for your own planning comes from that CFPB worksheet, part of its Your Money, Your Goals toolkit. It presents them as "guidelines to think about":

Two details matter. For homeowners, the worksheet adds that some lenders will go up to 43 percent or higher. For renters, the lower range applies to debts other than rent, so you can't compare a renter's ratio with rent included against the 15% to 20% line.

The worksheet also explains what the number means in plain terms: with a DTI of 36%, 36 cents of every dollar earned is going to pay for debt, leaving you 64 cents to pay for everything else. It calls the ratio a benchmark for planning, and says a high one could affect your ability to get more credit because creditors may worry you can't handle their debt on top of what you already owe.

How much credit card debt is too much?

The CFPB worksheet doesn't give a dollar amount, and your answer depends on your income and your other payments. The CFPB worksheet frames the question through DTI instead: the ratio measures how much pressure debt is putting on your budget, which helps you decide whether you can handle more. If yours is above the guideline, as a homeowner or a renter, the worksheet says you may want to think about ways to lower debt to put less pressure on your budget.

What mortgage rules use

If you're applying for a home loan, the lender's limit is the one that counts. A few federal rules set or once set specific numbers.

General Qualified Mortgages: the 43% cap is gone

You'll still see 43% quoted as the mortgage maximum. On December 10, 2020, the CFPB issued a final rule that replaces the current requirement for General QM loans that the consumer's debt-to-income ratio (DTI) not exceed 43 percent with a price-based approach. The same rule still requires lenders to consider a consumer's DTI ratio or residual income. So DTI still matters, but the General QM rule no longer names a DTI cap, and as the CFPB notes, different loan products and lenders have different limits.

VA home loans: 41%

VA's underwriting rule computes the ratio as the monthly principal, interest, taxes and insurance (PITI) on the loan, plus homeowners association and similar assessments, plus long-term obligations, divided by the total of gross salary or earnings and other compensation or income. It's rounded to a whole percentage, and the rule says: The standard is 41 percent or less.

Going over 41% isn't an automatic no. VA's rule ordinarily looks at both the ratio and the veteran's residual income (what's left for living expenses after housing costs and other monthly obligations). Above 41%, an approval generally needs a written justification, signed by the underwriter's supervisor, naming compensating factors such as excellent long-term credit, minimal consumer debt or significant liquid assets; the lender can instead send the loan to VA for prior approval. If residual income beats VA's guideline by at least 20%, that extra step isn't required.

USDA-backed rural home loans: 29% and 41%

USDA's underwriting rule for the rural home loans it backs (7 CFR part 3555) says an applicant has adequate repayment ability when the monthly housing payment (PITI, plus association dues and similar assessments) does not exceed 29 percent of the applicant's repayment income, and housing plus recurring monthly debts do not exceed 41%. USDA measures this against "repayment income," which a related section defines as the amount of adequate and stable income from all sources the borrowers are expected to receive.

The rule allows the ratios to be exceeded when certain compensating factors exist, such as a credit score of 680 or higher, a minimal increase in housing expense, a shown ability to build savings and cash reserves after closing, or continuous employment with your current main employer. Those exceptions need written approval from Rural Development or acceptance by an agency-approved automated underwriting system.

Work out your own DTI

Here's an example with made-up numbers, run through the same formula our calculator uses. Someone rents and earns $4,500 a month before taxes. Their debts:

$595 ÷ $4,500 = 13.2%. Because the CFPB's renter guideline leaves rent out, that's the number to compare with 15% to 20%, and it's under the range.

Now say they apply for a VA home loan with a monthly PITI of $1,400 (also made up). Under VA's formula, the new housing payment joins the debts: $1,400 + $595 = $1,995, and $1,995 ÷ $4,500 = 44.3%, which rounds to 44%. That's above VA's 41% standard, so the extra steps described above would apply. Paying off the $320 car loan first would bring it to $1,675 ÷ $4,500 = 37.2%, or 37%.

Enter your own payments and gross income to see your ratio. If a lender has told you its limit, you can enter that too.

DTI uses gross pay, so a ratio that looks fine can still leave a tight month. To check whether your minimums fit what you actually take home, run the budget calculator as well.

How to lower a high DTI

There are only two levers: smaller monthly debt payments or more gross income. Start with what asks the least of you.

1. Pay down balances with a plan

As your debt goes down, the CFPB worksheet notes, so will your debt-to-income ratio, which frees money for savings, expenses and emergencies. Paying off a whole account removes its minimum from the ratio, as the car loan did in the example. Debt avalanche vs snowball compares the two common orders for paying debts off.

2. Call before you fall behind

The FTC says that if you're behind on your bills, call the creditors you owe money to. Don't wait. Explain what's going on and ask about a payment plan you can manage.

3. Talk to a counselor

The FTC suggests looking for credit counseling at credit unions, universities and similar places, and notes that many charge low fees, but that you should ask what they'll charge you. If a counselor suggests a debt management plan, the FTC says it can take 48 months or more to complete, and it's for unsecured debts, not ones secured by a house or car. Our debt management plan guide covers how these plans work. If your mortgage debt ratio is above the CFPB's guideline, the worksheet suggests a HUD-certified housing counselor.

If your DTI is high because of card balances, how to get out of credit card debt goes through every option in order, with the cost of each.

Bottom line

No source gives one answer to what is a good debt to income ratio for everyone. Use gross income, count every debt payment, and compare the result with the benchmark that fits you: the CFPB's 36% (homeowners, mortgage included) or 15% to 20% (renters, rent left out) for planning, or the limit your lender or loan program uses, such as VA's 41%. If your number is above the line, the Debt Check can show which ways of bringing your payments down fit your debts.

Common questions

What is a good debt to income ratio?

There's no single cutoff. The CFPB says different loan products and lenders have different DTI limits. For planning, a CFPB worksheet suggests homeowners consider keeping all debts, mortgage included, at 36% or less of gross income, and renters at 15% to 20% or less, not counting rent.

Is DTI based on gross income or take-home pay?

Gross income. The CFPB defines DTI as all your monthly debt payments divided by your gross monthly income, the amount you earn before taxes and other deductions are taken out.

Is 43% still the maximum DTI for a mortgage?

Not as a federal rule for General Qualified Mortgages. In December 2020 the CFPB replaced the requirement that a General QM borrower's DTI not exceed 43% with a price-based approach, but lenders must still consider a borrower's DTI or residual income. Individual lenders and loan programs set their own limits.

What DTI do VA and USDA loans use?

VA's underwriting rule sets a standard of 41% or less. VA ordinarily looks at both the ratio and residual income, and above 41% an approval generally needs a written justification signed by the underwriter's supervisor, or VA's prior approval. For the rural home loans USDA backs (guarantees loans made by lenders), its rule looks for housing costs at or under 29% and total debt at or under 41% of repayment income, with exceptions when certain compensating factors exist.

Does rent count in my debt-to-income ratio?

It depends on which measure you're using. The CFPB's 15% to 20% guideline for renters leaves rent out. For homeowners, the CFPB's 36% guideline includes the mortgage, and VA and USDA count the housing payment on the loan you're applying for.

Sources

1. 1CFPB: What is a debt-to-income ratio?
2. 2CFPB Your Money, Your Goals: Debt-to-income calculator
3. 3CFPB: Consumer Financial Protection Bureau issues two final rules to promote access to responsible, affordable mortgage credit (2020-12-10)
4. 438 CFR 36.4340: VA underwriting standards (Cornell LII)
5. 57 CFR 3555.151: USDA rural housing loan underwriting (Cornell LII)
6. 67 CFR 3555.152: Calculation of income and assets (Cornell LII)
7. 7FTC: How to get out of debt

By DebtCheckUSA Editorial Team. First published October 26, 2026. Advertiser disclosure