Front-end isolates housing
The front-end ratio divides total housing obligations—payment, property tax, insurance, mortgage insurance, and association dues—by gross monthly income.
Household debt capacity and lender-style stress test
Measure today’s ratios and the proposed obligation separately
Convert annual income to a monthly underwriting base, calculate front-end and back-end DTI, separate every recurring debt, solve target housing capacity, and stress lower income and higher housing costs.
Plan with context
Debt-to-income measures recurring obligations against gross income—not complete affordability.
Lenders use DTI as one qualification signal, but households also need to consider taxes, benefits, childcare, food, utilities, repairs, savings, reserves, credit, and income stability.
Back-end includes recurring debt
The broader ratio adds credit-card minimums, auto, student, personal, support, and other required monthly payments.
Qualifying income is documented
Bonus, commission, rental, investment, and other income may be averaged, reduced, or excluded when history and continuance requirements are not met.
Minimum payments need rules
Lenders can substitute formula payments for deferred loans, revolving accounts without reported minimums, or leases near expiration.
A threshold is not a budget
DTI excludes income tax and most living expenses, so a technically acceptable result can still create severe monthly cash pressure.
Stress exposes limited buffers
Testing lower income or higher housing costs shows how quickly a ratio can deteriorate after a job change, reassessment, premium increase, or rate reset.
Included
Four annual gross income sources, five housing categories, six other debt categories, current and proposed front/back DTI, custom targets, proposed new debt, maximum housing, additional capacity, required income, income stress, Chart.js obligation mix and scenario analysis.
Not included
Loan-program underwriting engines, credit scores, residual-income rules, reserves, assets, co-borrower separation, gross-up, rental-income worksheets, deferred-debt formulas, tax and insurance qualification changes, or automated approval.
Use it well
Use documented stable income, copy required payments from current statements, include the complete proposed housing payment, and compare lender qualification with a separate after-tax household budget.