Determine your eligibility for mortgages and loans by calculating your debt load.
1. Monthly Income
2. Monthly Debt Payments
Your Debt-to-Income Ratio
–%
Monthly Gross Income: $0.00
Total Monthly Debt: $0.00
Understanding Your Debt-to-Income (DTI) Ratio
Your Debt-to-Income (DTI) ratio is one of the most critical metrics lenders use to assess your financial health. It represents the percentage of your gross monthly income that goes toward paying debts. Unlike your credit score, which measures your credit history, your DTI measures your ability to manage monthly payments and repay new debts.
How DTI Is Calculated
The formula for DTI is straightforward but requires accuracy regarding your financial obligations. It is calculated as:
(Total Monthly Debt Payments / Gross Monthly Income) x 100
Included debts typically encompass:
Monthly rent or mortgage payments (including taxes and insurance).
Car loan payments.
Student loan payments.
Credit card minimum monthly payments (not the total balance).
Personal loans, child support, or alimony.
Living expenses such as utilities, groceries, and entertainment are not included in this calculation.
Interpreting Your Result
Lenders generally categorize DTI ratios into three tiers regarding mortgage approval and financial stability:
36% or Lower (Healthy): This is the ideal range. It indicates you have manageable debt and plenty of disposable income. You are likely to get approved for loans with the best interest rates.
36% to 43% (Manageable): You likely qualify for mortgages, but lenders may scrutinize your application more closely. This is often the upper limit for "Qualified Mortgages."
43% or Higher (High Risk): At this level, lenders worry about your ability to meet monthly obligations if an emergency arises. Obtaining a standard mortgage becomes difficult, often requiring a co-signer or debt reduction before approval.
Front-End vs. Back-End Ratio
There are technically two types of DTI ratios. The Front-End Ratio considers only your housing costs against your income (ideally under 28%). The Back-End Ratio considers housing plus all other debts (ideally under 36%). This calculator computes the Back-End ratio, as it is the comprehensive figure used for final loan approvals.
Tips to Lower Your DTI
If your ratio is higher than 43%, consider these steps before applying for a major loan:
Increase Income: Taking on a side gig or asking for a raise increases the denominator in the calculation, lowering the percentage.
Pay Off Small Debts: Eliminate credit card balances or small loans entirely to remove that monthly payment from the "debt" side of the equation.
Refinance: Refinancing high-interest loans can lower monthly payments, thereby improving your DTI ratio immediately.
function calculateDTI() {
// 1. Get Input Values
var annualIncome = parseFloat(document.getElementById('annual-income').value);
var housing = parseFloat(document.getElementById('monthly-housing').value) || 0;
var car = parseFloat(document.getElementById('monthly-car').value) || 0;
var student = parseFloat(document.getElementById('monthly-student').value) || 0;
var cc = parseFloat(document.getElementById('monthly-cc').value) || 0;
var personal = parseFloat(document.getElementById('monthly-personal').value) || 0;
var other = parseFloat(document.getElementById('monthly-other').value) || 0;
// 2. Validation
if (!annualIncome || annualIncome <= 0) {
alert("Please enter a valid Annual Gross Income greater than zero.");
return;
}
// 3. Logic & Calculation
var monthlyIncome = annualIncome / 12;
var totalMonthlyDebt = housing + car + student + cc + personal + other;
var dtiRatio = (totalMonthlyDebt / monthlyIncome) * 100;
// 4. Determine Status
var statusMsg = "";
var statusClass = "";
var advice = "";
if (dtiRatio 36 && dtiRatio <= 43) {
statusMsg = "Good: Moderate Risk";
statusClass = "status-warning";
advice = "Your debt is manageable, but you are approaching the limit for many mortgage lenders (43%). Avoid taking on new debt.";
} else {
statusMsg = "Critical: High Risk";
statusClass = "status-bad";
advice = "Your debt-to-income ratio is above the standard 43% limit for most mortgages. Focus on paying off debt or increasing income.";
}
// 5. Update DOM
var resultContainer = document.getElementById('dti-result-container');
var scoreDisplay = document.getElementById('dti-score-display');
var msgDisplay = document.getElementById('dti-status-msg');
var incomeDisplay = document.getElementById('res-monthly-income');
var debtDisplay = document.getElementById('res-total-debt');
var adviceDisplay = document.getElementById('res-advice');
resultContainer.style.display = 'block';
scoreDisplay.innerHTML = dtiRatio.toFixed(1) + "%";
// Update Status Bar
msgDisplay.innerHTML = statusMsg;
msgDisplay.className = "dti-status-bar " + statusClass;
// Update Breakdown
incomeDisplay.innerHTML = monthlyIncome.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
debtDisplay.innerHTML = totalMonthlyDebt.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
adviceDisplay.innerHTML = advice;
// Scroll to result
resultContainer.scrollIntoView({behavior: "smooth"});
}