Analyze your financial health and mortgage eligibility
Monthly Debts
Monthly Income
Your total income before taxes/deductions
Your DTI Ratio is:
0%
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Understanding Your Debt-to-Income Ratio
The Debt-to-Income (DTI) ratio is a critical financial metric used by lenders, particularly mortgage companies, to measure your ability to manage monthly payments and repay debts. It compares your total monthly debt obligations to your gross monthly income.
How to Calculate DTI Ratio
The mathematical formula for calculating your DTI is simple:
When you apply for a loan, lenders look at your DTI to determine your risk profile. A lower DTI indicates a healthy balance between debt and income, suggesting you have enough cash flow to cover new loan payments. Conversely, a high DTI suggests you might be overextended financially.
Mortgage Approval: Most conventional lenders prefer a DTI of 36% or lower, though some programs allow up to 43% or 50% in special cases.
Interest Rates: Borrowers with lower DTI ratios often qualify for better interest rates and terms.
Financial Stability: Tracking your DTI helps you understand if your debt load is becoming unmanageable before it impacts your credit score.
Example Calculation
Imagine you have the following monthly expenses and income:
Item
Amount
Gross Monthly Income
$6,000
Rent/Mortgage Payment
$1,800
Car Loan + Credit Cards
$600
Total Monthly Debt
$2,400
Result: ($2,400 ÷ $6,000) × 100 = 40% DTI.
function calculateDTI() {
// Collect Input Values
var rent = parseFloat(document.getElementById('rent_mortgage').value) || 0;
var car = parseFloat(document.getElementById('car_loans').value) || 0;
var student = parseFloat(document.getElementById('student_loans').value) || 0;
var credit = parseFloat(document.getElementById('credit_cards').value) || 0;
var other = parseFloat(document.getElementById('other_debt').value) || 0;
var grossIncome = parseFloat(document.getElementById('gross_income').value) || 0;
// Elements for output
var resultBox = document.getElementById('dti-result-box');
var percentageDisplay = document.getElementById('dti-percentage');
var statusDisplay = document.getElementById('dti-status');
var detailsBox = document.getElementById('dti-details');
var interpretationText = document.getElementById('dti-interpretation');
// Validation
if (grossIncome <= 0) {
alert("Please enter a valid Gross Monthly Income to calculate your ratio.");
return;
}
// Calculation Logic
var totalMonthlyDebt = rent + car + student + credit + other;
var dtiRatio = (totalMonthlyDebt / grossIncome) * 100;
var finalRatio = dtiRatio.toFixed(1);
// Display results
resultBox.style.display = 'block';
detailsBox.style.display = 'block';
percentageDisplay.innerText = finalRatio + "%";
// Logic for Rating and Color
var status = "";
var bgColor = "";
var textColor = "#ffffff";
var advice = "";
if (dtiRatio 35 && dtiRatio 43 && dtiRatio <= 50) {
status = "High";
bgColor = "#ef6c00";
advice = "Your DTI is high. You may struggle to qualify for a traditional mortgage. Consider paying down credit cards or car loans to lower this ratio before applying for new credit.";
} else {
status = "Critical";
bgColor = "#c62828";
advice = "A DTI above 50% means more than half your income goes toward debt. This is considered high risk by almost all lenders and leaves very little room for savings or emergency expenses.";
}
statusDisplay.innerText = status;
statusDisplay.style.backgroundColor = bgColor;
statusDisplay.style.color = textColor;
interpretationText.innerHTML = "Analysis: " + advice + "Your total monthly debt payments are $" + totalMonthlyDebt.toLocaleString() + " against a monthly gross income of $" + grossIncome.toLocaleString() + ".";
// Smooth scroll to results if on mobile
resultBox.scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}