The debt-to-income (DTI) ratio is a personal finance measure that compares an individual's monthly debt payments to their monthly gross income. Lenders, specifically mortgage lenders, use this percentage to evaluate your ability to manage monthly payments and repay borrowed money.
Understanding Your DTI Results
DTI Ratio
Lender Perspective
36% or Less
Excellent: Ideal for mortgage approval and low interest rates.
37% – 43%
Good: Most lenders still consider you a manageable risk.
44% – 50%
Caution: You may struggle to get a traditional mortgage; high risk.
Over 50%
High Risk: Debt consumes more than half your income. Financial limit reached.
Example DTI Calculation
If you earn $6,000 per month (Gross Income) and have the following expenses:
Rent: $1,500
Car Payment: $400
Credit Card Minimum: $100
Your total monthly debt is $2,000.
Calculation: ($2,000 / $6,000) x 100 = 33.3% DTI Ratio.
How to Lower Your DTI Ratio
Increase Gross Income: Overtime, bonuses, or side hustles can boost your denominator.
Pay Down Debt: Focus on eliminating small balances or high-interest credit cards.
Avoid New Debt: Postpone large purchases like new vehicles before applying for a home loan.
Refinance: Lowering interest rates on existing loans can reduce your monthly debt payment.
function calculateDTI() {
var grossIncome = parseFloat(document.getElementById('grossIncome').value) || 0;
var housing = parseFloat(document.getElementById('housing').value) || 0;
var carLoans = parseFloat(document.getElementById('carLoans').value) || 0;
var studentLoans = parseFloat(document.getElementById('studentLoans').value) || 0;
var creditCards = parseFloat(document.getElementById('creditCards').value) || 0;
var otherDebt = parseFloat(document.getElementById('otherDebt').value) || 0;
var totalMonthlyDebt = housing + carLoans + studentLoans + creditCards + otherDebt;
var resultDiv = document.getElementById('dtiResult');
var ratioValue = document.getElementById('ratioValue');
var ratioStatus = document.getElementById('ratioStatus');
var totalDebtDisplay = document.getElementById('totalDebtDisplay');
if (grossIncome <= 0) {
alert("Please enter a valid gross monthly income greater than zero.");
return;
}
var dtiRatio = (totalMonthlyDebt / grossIncome) * 100;
resultDiv.style.display = "block";
ratioValue.innerText = dtiRatio.toFixed(2) + "%";
totalDebtDisplay.innerText = "$" + totalMonthlyDebt.toLocaleString();
if (dtiRatio <= 36) {
resultDiv.style.backgroundColor = "#e8f5e9";
ratioStatus.innerText = "Excellent: Your DTI is in a healthy range for most lenders.";
ratioStatus.style.color = "#2e7d32";
} else if (dtiRatio <= 43) {
resultDiv.style.backgroundColor = "#fff3e0";
ratioStatus.innerText = "Good: You are within the acceptable limit for many mortgage products.";
ratioStatus.style.color = "#ef6c00";
} else if (dtiRatio <= 50) {
resultDiv.style.backgroundColor = "#fffde7";
ratioStatus.innerText = "Caution: Your debt levels are high. Approval may be difficult.";
ratioStatus.style.color = "#f9a825";
} else {
resultDiv.style.backgroundColor = "#ffebee";
ratioStatus.innerText = "High Risk: Your debt-to-income ratio is dangerously high.";
ratioStatus.style.color = "#c62828";
}
}