How to Get a Mortgage with Student Loans 2026: DTI Strategies That Actually Work
$50K in student loans doesn't mean you can't buy a home. Learn how lenders calculate your DTI, income-driven repayment strategies, and how to get approved even with six figures in student debt.
⚡ Quick Answer: Can You Get a Mortgage with Student Loans?
YES! 83% of first-time homebuyers have student loans (average $30K-$50K). Lenders allow student debt as long as your DTI stays under 43-50%.
Key strategies: Income-driven repayment plans, higher income, larger down payment, or paying down other debts. You don't need to be debt-free to buy a home.
🎯 Get Pre-Approved with Student Loans (See Your Max Amount)
Find out exactly how much you can borrow with your student loan debt. Lenders calculate your DTI and show your maximum loan amount:
📊 Student Loans & Mortgages at a Glance
📋 In This Guide
How Lenders Count Student Loan Payments
Lenders don't care about your total student loan balance. They care about your monthly payment because that affects your DTI (debt-to-income ratio).
📐 The Rule:
Lenders use whichever is HIGHER:
1. Your actual monthly payment (if on repayment)
2. 0.5-1% of total balance (if in deferment/forbearance)
3. $0 (if on income-driven repayment with $0 payment)
3 Scenarios: How Lenders Calculate
| Loan Status | Balance | Actual Payment | Lender Uses |
|---|---|---|---|
| Active Repayment | $50,000 | $500/month | $500/month |
| Deferment/Forbearance | $50,000 | $0/month | $250-500/month (0.5-1%) |
| Income-Driven ($0 payment) | $50,000 | $0/month | $0/month (with docs) |
💡 HUGE TIP: If your loans are in deferment, lenders count 0.5-1% of balance even though you're paying $0. $50K loans = $250-500/month counted toward DTI. Switch to income-driven repayment with documented $0 payment = lenders count $0. This can be the difference between approval and denial.
DTI Calculation with Student Loans
DTI (Debt-to-Income Ratio) = All monthly debts ÷ Gross monthly income
Example: Sarah's DTI Calculation
- Gross monthly income: $6,000
- Student loan payment: $400
- Car payment: $350
- Credit card minimum: $50
- Proposed mortgage payment: $1,800 (PITI)
DTI Calculation:
($400 + $350 + $50 + $1,800) ÷ $6,000 = 43.3% DTI
❌ DENIED for conventional loan (43% max)
✅ APPROVED for FHA loan (50% max)
What Counts as "Debt" in DTI?
✅ COUNTS Toward DTI
- • Student loan payments
- • Car loans/leases
- • Credit card minimums
- • Personal loans
- • Alimony/child support (paid)
- • Other mortgages/rent
- • Proposed mortgage payment (PITI)
❌ DOESN'T Count
- • Utilities (electric, water, gas)
- • Phone/internet bills
- • Insurance (health, auto, life)
- • Groceries/food
- • Entertainment/subscriptions
- • Medical bills (unless in collections)
- • Debts paid off in <10 months
💰 Calculate YOUR DTI with Student Loans
Get pre-approved and see your exact DTI calculation. Lenders show you how student loans affect your buying power:
Get Free DTI Analysis + Pre-ApprovalIncome-Driven Repayment Strategies
Income-Driven Repayment (IDR) plans can dramatically lower your DTI and help you qualify for a mortgage.
4 Income-Driven Plans
| Plan | Payment | Best For |
|---|---|---|
| SAVE Plan (NEW 2024) | 5-10% of income | Lowest payments, best for low income |
| PAYE | 10% of income | New borrowers after 2007 |
| IBR | 10-15% of income | Most borrowers, widely available |
| ICR | 20% of income | Parent PLUS loans (only option) |
Real Example: IDR Impact on DTI
❌ Standard Repayment
- • Student loans: $60,000
- • Monthly payment: $600
- • Income: $5,000/month
- • Other debts: $400
- • Proposed mortgage: $1,500
DTI: ($600 + $400 + $1,500) ÷ $5,000 = 50% DTI
Result: DENIED (conventional max 43%)
✅ Income-Driven (SAVE)
- • Student loans: $60,000
- • Monthly payment: $200 (IDR)
- • Income: $5,000/month
- • Other debts: $400
- • Proposed mortgage: $1,500
DTI: ($200 + $400 + $1,500) ÷ $5,000 = 42% DTI
Result: APPROVED! ✅
✅ ACTION STEP: If you're in standard repayment and struggling to qualify, switch to income-driven repayment BEFORE applying for mortgage. Contact your loan servicer (Mohela, Aidvantage, etc.) and request SAVE plan enrollment. Takes 2-4 weeks. Lenders will use your new lower payment.
Maximum DTI by Loan Type
| Loan Type | Max DTI | Notes |
|---|---|---|
| Conventional | 43% | 50% with compensating factors (high credit, reserves) |
| FHA | 50% | 55% with strong credit (680+) and reserves |
| VA | No Limit | Most lenders cap at 50%, but flexible |
| USDA | 41% | Strictest DTI requirements |
Real-World Examples: 3 Scenarios
Scenario 1: Recent Grad (APPROVED with IDR)
Profile: Alex, 26, software engineer
- Income: $85,000/year ($7,083/month gross)
- Student loans: $45,000 (switched to SAVE plan = $180/month)
- Car payment: $350/month
- Credit cards: $50/month minimum
- Target home: $350,000 (5% down)
- Proposed mortgage: $2,200/month (PITI)
DTI Calculation:
($180 + $350 + $50 + $2,200) ÷ $7,083 = 39.3% DTI
✅ APPROVED for conventional loan (under 43% max)
Scenario 2: High Debt (APPROVED with FHA)
Profile: Maria, 32, teacher
- Income: $55,000/year ($4,583/month gross)
- Student loans: $80,000 (IBR plan = $350/month)
- Car payment: $400/month
- Credit cards: $100/month minimum
- Target home: $250,000 (3.5% FHA down)
- Proposed mortgage: $1,550/month (PITI + MIP)
DTI Calculation:
($350 + $400 + $100 + $1,550) ÷ $4,583 = 52.4% DTI
❌ DENIED for conventional (over 43%)
❌ DENIED for FHA initially (over 50%)
✅ APPROVED after paying off credit cards ($100 saved = 50.2% DTI)
Scenario 3: Medical School Debt (APPROVED with VA)
Profile: Dr. James, 35, military veteran, physician
- Income: $180,000/year ($15,000/month gross)
- Student loans: $250,000 (PAYE plan = $1,200/month)
- No other debts
- Target home: $600,000 (0% down VA loan)
- Proposed mortgage: $3,800/month (PITI)
DTI Calculation:
($1,200 + $3,800) ÷ $15,000 = 33.3% DTI
✅ APPROVED for VA loan (well under 50% guideline)
Note: $250K student debt didn't matter - only $1,200/month payment counted
🎯 Ready to Get Approved with Student Loans?
Get pre-approved and see exactly how your student loans affect your buying power. Lenders calculate your DTI and show your maximum loan amount:
7 Strategies to Qualify with Student Loans
1. Switch to Income-Driven Repayment
Lower your monthly payment from $500 to $150-200 using SAVE, PAYE, or IBR plans. Lenders use your new lower payment for DTI calculation. Apply at StudentAid.gov.
2. Pay Down High-Interest Debt
Paying off $5K in credit cards ($150/month) improves DTI more than paying off $5K in student loans ($50/month). Target high-payment debts first.
3. Increase Your Income
Side hustle, raise, or promotion = lower DTI. $1,000/month extra income = 20% DTI improvement. Lenders need 2 years history for self-employment income.
4. Larger Down Payment
20% down vs 5% down = $300-500/month lower mortgage payment = better DTI. Plus no PMI saves $100-200/month.
5. Choose FHA Over Conventional
FHA allows 50% DTI vs conventional 43%. If you're at 45-48% DTI, FHA might be your only option. Only 3.5% down required.
6. Add a Co-Borrower
Spouse or partner with income = combined income lowers DTI. Their debts count too, so only helps if their income > their debts.
7. Wait for Loan Forgiveness
If you're 1-2 years from PSLF forgiveness, consider waiting. Once forgiven (balance $0), loans don't count toward DTI. But don't wait if forgiveness is 5+ years away.
Frequently Asked Questions
Should I pay off student loans before buying a house?
Only if it significantly improves your DTI. Example: If you're at 45% DTI and need to get to 43%, paying off $10K in loans ($100/month) drops you to 43.3% = approved. But if you're at 38% DTI, keep that $10K for down payment or emergency fund. Get pre-approved to see your exact DTI.
Do private student loans count differently than federal?
No difference for DTI calculation. Lenders count the monthly payment regardless of loan type. However, federal loans offer income-driven repayment (lower payments), while private loans typically don't. If you have high private loan payments, consider refinancing to lower your monthly payment.
What if my student loans are in default?
You cannot get a mortgage with defaulted federal student loans. You must rehabilitate or consolidate loans first. Rehabilitation: Make 9 on-time payments, then default removed. Consolidation: Combine loans into new loan, removes default. Takes 3-6 months. See credit repair guide.
Can I use student loan refunds for down payment?
NO. Lenders don't allow borrowed money (including student loan refunds) for down payment. Down payment must come from: savings, gift from family, down payment assistance programs, or sale of assets. Using student loan money is mortgage fraud.
Does student loan forgiveness help with mortgage approval?
Only after it's approved and balance is $0. Pending forgiveness applications don't help - lenders count current balance and payment. If you're approved for PSLF and balance drops to $0, then loans don't count toward DTI. But don't delay homebuying waiting for forgiveness unless it's imminent (within 6 months).
Meet Emily
Construction & Commercial Loans Expert
Emily Chen specializes in complex financing solutions for construction projects and commercial real estate investments. With 8 years of experience in construction-to-permanent loans and DSCR financing, she has funded over $200 million in construction and investment property projects. Her expertise in navigating construction loan complexities and commercial underwriting makes her invaluable for real estate investors and builders.
EXPERTISE:
KEY ACHIEVEMENT:
Funded $200M+ in construction projects