Debt-to-Income Back-End Ratio 2026: What Gets Counted and What Does Not

Back-end DTI is the ratio of all monthly debt obligations to gross monthly income. It is also called total DTI. Lenders calculate it using debts from the credit report plus housing expenses for the new loan. A clean understanding of what counts and what does not can mean the difference between qualifying a borrower or restructuring the deal.

What Is Included in Back-End DTI

• ✦Proposed housing payment: PITI (principal, interest, property taxes, hazard insurance)
• ✦HOA fees if applicable
• ✦Minimum monthly payments on all revolving accounts (credit cards, HELOCs)
• ✦All installment loan payments (auto, student, personal loans)
• ✦Alimony or child support payments
• ✦Monthly payment on any other real property financed
• ✦Lease payments on vehicles even if not on credit report when disclosed

What Is Excluded from DTI

Utilities, cell phone bills, streaming subscriptions, gym memberships, insurance premiums (except hazard and MI already in PITI), and health care costs are not counted. Business debts paid by a business entity can be excluded if 12 months of business bank statements show the payments come from a business account, not personal funds.

Student Loan DTI Treatment

For conventional loans, Fannie Mae requires the greater of 1% of the outstanding balance or the actual monthly payment. For FHA, if the payment is deferred, FHA uses 1% of the outstanding balance. If the borrower is on an income-driven repayment plan with a documented payment amount, Fannie Mae now allows the actual IBR payment, even if it is $0. Knowing the exact applicable rule avoids inflating DTI unnecessarily.