.lti-calc-wrapper {
font-family: -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif;
max-width: 650px;
margin: 20px auto;
padding: 25px;
background: #f9f9f9;
border: 1px solid #e0e0e0;
border-radius: 8px;
box-shadow: 0 2px 10px rgba(0,0,0,0.05);
}
.lti-calc-header {
text-align: center;
margin-bottom: 25px;
}
.lti-calc-header h3 {
margin: 0;
color: #2c3e50;
font-size: 24px;
}
.lti-input-group {
margin-bottom: 20px;
}
.lti-input-group label {
display: block;
margin-bottom: 8px;
font-weight: 600;
color: #444;
}
.lti-input-wrapper {
position: relative;
}
.lti-currency-symbol {
position: absolute;
left: 10px;
top: 50%;
transform: translateY(-50%);
color: #777;
}
.lti-input-group input {
width: 100%;
padding: 12px 12px 12px 25px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 16px;
box-sizing: border-box;
}
.lti-btn {
width: 100%;
padding: 14px;
background-color: #2c3e50;
color: white;
border: none;
border-radius: 4px;
font-size: 18px;
font-weight: bold;
cursor: pointer;
transition: background 0.3s;
}
.lti-btn:hover {
background-color: #34495e;
}
#lti-result-container {
margin-top: 25px;
padding: 20px;
background: #ffffff;
border: 1px solid #ddd;
border-radius: 6px;
display: none;
text-align: center;
}
.lti-main-result {
font-size: 32px;
font-weight: 800;
color: #2c3e50;
display: block;
margin-bottom: 10px;
}
.lti-badge {
display: inline-block;
padding: 6px 12px;
border-radius: 20px;
font-size: 14px;
font-weight: bold;
color: white;
margin-bottom: 15px;
}
.lti-status-green { background-color: #27ae60; }
.lti-status-yellow { background-color: #f39c12; }
.lti-status-red { background-color: #c0392b; }
.lti-explanation {
font-size: 14px;
color: #666;
line-height: 1.5;
border-top: 1px solid #eee;
padding-top: 15px;
margin-top: 15px;
}
/* Article Styles */
.lti-content {
max-width: 800px;
margin: 40px auto;
font-family: inherit;
line-height: 1.6;
color: #333;
}
.lti-content h2 { color: #2c3e50; margin-top: 30px; }
.lti-content h3 { color: #34495e; margin-top: 25px; }
.lti-content p { margin-bottom: 15px; }
.lti-content ul { margin-bottom: 15px; padding-left: 20px; }
.lti-content li { margin-bottom: 8px; }
.lti-faq { background: #f4f6f7; padding: 20px; border-radius: 8px; margin-top: 30px; }
function calculateLTIRate() {
// 1. Get input elements
var incomeInput = document.getElementById('annualIncome');
var loanInput = document.getElementById('loanAmount');
var resultContainer = document.getElementById('lti-result-container');
var ratioDisplay = document.getElementById('lti-ratio-display');
var statusBadge = document.getElementById('lti-status-badge');
var explanationText = document.getElementById('lti-explanation-text');
// 2. Parse values
var income = parseFloat(incomeInput.value);
var loan = parseFloat(loanInput.value);
// 3. Validation
if (isNaN(income) || income <= 0) {
alert("Please enter a valid Annual Income greater than 0.");
return;
}
if (isNaN(loan) || loan <= 0) {
alert("Please enter a valid Loan Amount greater than 0.");
return;
}
// 4. Calculate Logic
// LTI Formula: Loan Amount / Annual Income
var ltiRatio = loan / income;
// Round to 2 decimal places
var formattedRatio = Math.round(ltiRatio * 100) / 100;
// 5. Update UI
resultContainer.style.display = 'block';
ratioDisplay.innerHTML = formattedRatio + "x
";
// 6. Determine Status/Risk (Based on typical 4.5x cap common in banking)
var statusMessage = "";
var statusClass = "";
var labelText = "";
if (formattedRatio <= 3.0) {
statusClass = "lti-status-green";
labelText = "Conservative";
statusMessage = "This ratio is considered very safe. You are borrowing " + formattedRatio + " times your annual income, which is well within standard lending limits.";
} else if (formattedRatio <= 4.5) {
statusClass = "lti-status-green";
labelText = "Standard / Approved";
statusMessage = "This falls within the standard lending cap (typically 4.5x income). Most lenders would consider this ratio acceptable provided you have good credit.";
} else if (formattedRatio <= 5.5) {
statusClass = "lti-status-yellow";
labelText = "High / Stretch";
statusMessage = "This is a high LTI ratio. Only specialized lenders or borrowers with high incomes and professional qualifications usually qualify for multipliers above 4.5x.";
} else {
statusClass = "lti-status-red";
labelText = "Very High Risk";
statusMessage = "This ratio (" + formattedRatio + "x) exceeds almost all standard lending criteria. It is unlikely to be approved by traditional banks without significant collateral or guarantors.";
}
// Apply classes and text
statusBadge.className = "lti-badge " + statusClass;
statusBadge.innerText = labelText;
explanationText.innerText = statusMessage;
}
Understanding Loan-To-Income (LTI) Rates
The Loan-To-Income (LTI) ratio is a fundamental metric used by mortgage lenders and banks to assess affordability. Unlike Debt-to-Income (DTI), which looks at monthly outgoings, the LTI ratio looks at the gross relationship between your total annual income and the total amount you wish to borrow.
How is LTI Calculated?
The calculation is straightforward but critical for loan approval. It is calculated by dividing the total loan amount by your gross annual income.
Formula: Total Loan Amount ÷ Gross Annual Income = LTI Ratio
For example, if you earn $80,000 per year and want to buy a home with a $360,000 mortgage:
- $360,000 ÷ $80,000 = 4.5
- Your LTI ratio is 4.5x.
The Importance of the "Multiplier" Cap
Most central banks and financial regulators impose "flow limits" or caps on how much a bank can lend relative to income. In many markets, the standard cap is 4.5x income. This means typically, you cannot borrow more than 4.5 times your gross annual salary.
However, exemptions exist. Lenders may be allowed to issue a small percentage of their loans to "high LTI" borrowers (e.g., up to 5.0x or 6.0x), often reserved for:
- High-income earners
- Professionals with predictable career progression (doctors, lawyers)
- Borrowers with substantial deposits/equity
LTI vs. DTI: What's the Difference?
While this calculator focuses on LTI, it is important not to confuse it with DTI:
- LTI (Loan-To-Income): Calculates the total debt multiplier (e.g., 4.5x). It is a macro cap on borrowing power.
- DTI (Debt-To-Income): Calculates the percentage of your monthly income that goes toward debt payments (e.g., 36%). It ensures you have enough cash flow to pay bills.
Frequently Asked Questions
Does a joint application increase my LTI?
Yes and no. The ratio cap usually remains the same (e.g., 4.5x), but because you combine two incomes, the total amount you can borrow increases. For example, two people earning $50,000 each have a combined income of $100,000, allowing for a $450,000 loan at 4.5x LTI.
Can bonuses be included in income?
Most lenders will include 50% to 100% of annual bonuses or overtime if a 2-year track record can be proven. This effectively lowers your calculated LTI ratio by increasing the denominator (Income).
What is a "Flow Limit"?
A flow limit is a regulatory rule that prevents banks from lending more than a certain percentage of their new mortgages at high LTI ratios. If the bank has reached its limit for the quarter, they may deny a high LTI loan even if you can afford the monthly payments.