Debt-to-Income Ratio Calculator

1. Add up your total monthly debt payments and enter the total.
2. Enter your gross monthly income, before tax.
3. Read your debt-to-income ratio as a percentage.
4. Check the lender band to see how it is usually viewed.

Here is what each result means:

The debt-to-income ratio, or DTI, is the share of your gross monthly income that goes toward paying debts. It is one of the main numbers lenders look at when deciding whether to approve a mortgage, car loan or credit card, because it shows how much room you have in your budget to take on a new payment.

To find it, add up all your monthly debt payments, such as a mortgage or rent, car loans, student loans and the minimum payments on credit cards, then divide by your gross monthly income and multiply by 100. If you pay 1,800 a month toward debts and earn 5,000 gross a month, your DTI is 1,800 divided by 5,000, which is 36 percent.

A lower DTI is better, because it means more of your income is free for saving, spending and handling surprises. Lenders generally prefer a DTI of 36 percent or below, and many mortgage programs treat 43 percent as an upper limit. A high DTI does not just make borrowing harder, it is also a sign that a budget may be stretched too thin.

It divides your monthly debt payments by your gross monthly income.

1. Add up every monthly debt payment to get your total monthly debt.
2. Divide it by your gross monthly income, before tax.
3. Multiply by 100 to express the ratio as a percentage.

DTI works alongside your overall finances; see the net worth calculator and the percentage calculator.

You pay 1,800 a month toward debts and earn 5,000 gross a month.

Calculation: DTI = 1800 / 5000 x 100 = 36 percent, right at the usual comfort limit. If your debts rose to 2,500, your DTI would be 50 percent, which most lenders would consider high.

Lenders sometimes split the ratio into two versions.

The front-end ratio looks only at housing costs, while the back-end ratio, which this calculator computes, covers all your debts. Mortgage lenders usually care most about the back-end figure, since it reflects your full debt load, but both matter when you apply for a home loan.

Where your ratio falls changes how lenders and your budget respond.

These bands are guides, not hard rules, and lenders weigh them with your credit score, savings and job stability. Still, keeping your DTI at or below 36 percent gives you the widest choice of loans and the most breathing room in your budget.

Your Debt Payments

Paying down loans or clearing a credit card lowers the top of the ratio and improves your DTI.

Your Income

A pay rise or extra income raises the bottom of the ratio and lowers your DTI, even if your debts stay the same.

New Borrowing

Taking on a new loan or card payment raises your DTI, which is why lenders check it before approving more credit.

Before Applying for a Mortgage

See where you stand against the limits lenders use.

Planning a Big Purchase

Check whether a new car or loan payment would push your DTI too high.

Reviewing Your Budget

Track your DTI over time as you pay down debt or your income grows.

1. Using Net Income

DTI uses gross, pre-tax income. Using take-home pay overstates the ratio.

2. Leaving Out Debts

Include every monthly debt: housing, car, student loans and credit card minimums.

3. Adding Living Costs

DTI counts debt payments, not groceries, utilities or other regular spending.

4. Using Full Card Balances

Use the monthly minimum payment on a card, not the whole balance.

5. Forgetting Co-borrowers

For a joint application, combine both incomes and both sets of debts.

The ratio is exact; the lender bands are general guides, since each lender sets its own rules.

It is the share of your gross monthly income that goes to debt payments, shown as a percentage. Paying 1,800 a month on debts from a 5,000 gross income is a DTI of 36 percent.

Add up your monthly debt payments, divide by your gross monthly income, and multiply by 100. For 1,800 in debts and 5,000 income, that is 36 percent.

36 percent or below is generally considered healthy. Many mortgage lenders treat 43 percent as an upper limit, and above that borrowing gets harder.

Use gross, pre-tax income. Lenders calculate DTI from gross income, so using take-home pay would make your ratio look worse than lenders see it.

Regular debt payments: mortgage or rent, car loans, student loans, personal loans and the minimum payments on credit cards. Everyday living costs are not included.

Front-end DTI counts only housing costs and is often capped near 28 percent. Back-end DTI, which this tool calculates, counts all debts and is usually limited to 36 to 43 percent.

Pay down debts to reduce your monthly payments, or increase your gross income. Avoiding new loans before a big application also keeps your ratio from rising.

Not directly, since DTI is not part of the score. But lenders check it alongside your score when deciding whether to approve a loan.

No. The calculation runs in your browser and nothing you enter is stored or sent anywhere, unless you choose Save, which keeps the result only on this device.

• Debt-to-income ratio (Wikipedia).
• What is a debt-to-income ratio (US Consumer Financial Protection Bureau).
• Loan-to-value and DTI (Investopedia).