Debt-to-Income (DTI) Ratio Calculator
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Debt-to-Income (DTI) Ratio Calculator
Your Debt-to-Income Ratio
0%
Unknown
Breakdown:
Total Monthly Income: $0
Total Monthly Debt: $0
Why this matters: Lenders use this number to determine your ability to repay a new loan. Generally, a DTI under 36% is ideal, while anything over 43% makes obtaining a qualified mortgage difficult.
Understanding Your Debt-to-Income (DTI) Ratio
Your Debt-to-Income (DTI) ratio is one of the most critical financial metrics used by lenders when you apply for credit, specifically for mortgages. Unlike your credit score, which measures your credit history, your DTI measures your monthly cash flow and ability to manage monthly payments.
How DTI is Calculated
The formula for calculating DTI is relatively straightforward, but accuracy is key. The calculator above uses the standard lending formula:
DTI = (Total Monthly Debt Payments / Gross Monthly Income) x 100
Gross Monthly Income is your income before taxes and deductions. Monthly Debt Payments include your housing costs (rent/mortgage, insurance, taxes) plus minimum payments on credit cards, student loans, car loans, and other personal debts.
Interpreting Your Results
- 35% or less (Excellent): You are in a strong financial position. Lenders view you as a low-risk borrower, and you likely have disposable income remaining after bills.
- 36% to 42% (Good/Manageable): You are generally eligible for most loans, including conventional mortgages, though you may have slightly less flexibility in your budget.
- 43% to 49% (Concerning): This is the tipping point. 43% is often the maximum DTI for a "Qualified Mortgage." While you may still qualify for FHA loans, you are carrying a heavy debt load relative to your income.
- 50% or higher (Critical): At this level, you are considered high risk. You may have trouble accessing new credit, and a significant portion of your income is going immediately to debt service.
Front-End vs. Back-End Ratio
While the calculator above focuses on your total (Back-End) DTI, lenders also look at the Front-End ratio:
- Front-End Ratio: Only includes housing expenses (Principal, Interest, Taxes, Insurance, HOA) divided by income. Ideally, this should be under 28%.
- Back-End Ratio: Includes housing plus all other recurring debts. Ideally, this should be under 36%.
How to Lower Your DTI
If your ratio is higher than desired, you have two primary levers to pull:
- Increase Income: Taking on a side hustle, asking for a raise, or including a co-borrower on a loan application can increase the denominator of the equation.
- Reduce Recurring Debt: Paying off a car loan or eliminating credit card balances lowers the numerator. Note: Paying down a balance doesn't always help your DTI unless you eliminate the monthly payment entirely or refinance for a lower monthly cost.
function calculateDTI() {
// 1. Get Input Values
var incomeInput = document.getElementById('dti_gross_income').value;
var housingInput = document.getElementById('dti_housing').value;
var autoInput = document.getElementById('dti_auto').value;
var studentInput = document.getElementById('dti_student').value;
var cardsInput = document.getElementById('dti_cards').value;
var otherInput = document.getElementById('dti_other').value;
// 2. Parse values to floats, defaulting to 0 if empty
var income = parseFloat(incomeInput) || 0;
var housing = parseFloat(housingInput) || 0;
var auto = parseFloat(autoInput) || 0;
var student = parseFloat(studentInput) || 0;
var cards = parseFloat(cardsInput) || 0;
var other = parseFloat(otherInput) || 0;
// 3. Validation
if (income <= 0) {
alert("Please enter a valid Gross Monthly Income greater than 0.");
return;
}
// 4. Perform Calculation
var totalDebt = housing + auto + student + cards + other;
var dtiRatio = (totalDebt / income) * 100;
// 5. Update UI with numbers
var dtiFormatted = dtiRatio.toFixed(1);
document.getElementById('dti_final_percent').innerText = dtiFormatted + "%";
document.getElementById('display_income').innerText = "$" + income.toLocaleString('en-US', {minimumFractionDigits: 0, maximumFractionDigits: 0});
document.getElementById('display_debt').innerText = "$" + totalDebt.toLocaleString('en-US', {minimumFractionDigits: 0, maximumFractionDigits: 0});
// 6. Determine Status and Colors
var statusBadge = document.getElementById('dti_status_badge');
var lenderVerdict = document.getElementById('lender_verdict');
var statusText = "";
var statusColor = "";
var verdictText = "";
if (dtiRatio <= 35) {
statusText = "Excellent";
statusColor = "#27ae60"; // Green
verdictText = "You have a healthy debt-to-income balance. You likely qualify for the best rates.";
} else if (dtiRatio <= 43) {
statusText = "Good / Manageable";
statusColor = "#f39c12"; // Orange
verdictText = "Your debt is manageable. You likely meet the requirements for a Qualified Mortgage.";
} else if (dtiRatio <= 49) {
statusText = "High Risk";
statusColor = "#e67e22"; // Darker Orange
verdictText = "Your DTI is high. You might struggle to get approved for conventional loans, though FHA might be an option.";
} else {
statusText = "Critical";
statusColor = "#c0392b"; // Red
verdictText = "Your debt load is critical relative to your income. Lenders will view this as very high risk.";
}
// 7. Update Status Elements
statusBadge.innerText = statusText;
statusBadge.style.backgroundColor = statusColor;
lenderVerdict.innerText = verdictText;
// 8. Show Results Area
document.getElementById('results-area').style.display = "block";
}