How Do I Calculate My Debt to Income Ratio

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Debt-to-Income (DTI) Ratio Calculator

Include salary, bonuses, and side income.

Your Debt-to-Income Ratio: 0%

function calculateDTI() { var income = parseFloat(document.getElementById('grossIncome').value) || 0; var housing = parseFloat(document.getElementById('monthlyHousing').value) || 0; var car = parseFloat(document.getElementById('carPayment').value) || 0; var cards = parseFloat(document.getElementById('creditCardMin').value) || 0; var student = parseFloat(document.getElementById('studentLoan').value) || 0; var other = parseFloat(document.getElementById('otherDebt').value) || 0; var resultDiv = document.getElementById('dtiResult'); var ratioSpan = document.getElementById('ratioPercentage'); var feedbackP = document.getElementById('dtiFeedback'); var explanationP = document.getElementById('dtiExplanation'); if (income <= 0) { alert('Please enter a valid gross monthly income.'); return; } var totalMonthlyDebt = housing + car + cards + student + other; var dtiRatio = (totalMonthlyDebt / income) * 100; resultDiv.style.display = 'block'; ratioSpan.innerText = dtiRatio.toFixed(2) + '%'; if (dtiRatio 35 && dtiRatio <= 43) { resultDiv.style.backgroundColor = '#fef7e0'; feedbackP.innerText = 'Fair: Manageable Ratio'; feedbackP.style.color = '#b06000'; explanationP.innerText = 'This is often the maximum DTI many lenders will accept for a qualified mortgage. You might still qualify for loans, but you have less wiggle room for unexpected expenses.'; } else { resultDiv.style.backgroundColor = '#fce8e6'; feedbackP.innerText = 'High: Limited Borrowing Power'; feedbackP.style.color = '#c5221f'; explanationP.innerText = 'A DTI over 43% may make it difficult to qualify for traditional loans. Lenders may view you as high-risk. Focus on paying down high-interest debts or increasing income to lower this ratio.'; } }

How to Calculate Your Debt-to-Income (DTI) Ratio

The Debt-to-Income (DTI) ratio is a critical financial metric used by lenders—especially mortgage providers—to determine your ability to manage monthly payments and repay borrowed money. It represents the percentage of your gross monthly income that goes toward paying your monthly debt obligations.

The DTI Formula

DTI Ratio = (Total Monthly Debt Payments / Gross Monthly Income) x 100

What is Included in the Calculation?

To get an accurate result, you must use your Gross Monthly Income, which is your total earnings before taxes and deductions. For the debt side, include recurring monthly payments such as:

  • Monthly rent or mortgage payments (including insurance and taxes)
  • Minimum monthly credit card payments
  • Auto loan installments
  • Student loan payments
  • Personal loan payments
  • Alimony or child support payments

Note: Do not include monthly expenses like groceries, utilities, or entertainment, as these are not considered "contractual debt."

Why Your DTI Ratio Matters

Lenders use this ratio to measure risk. A low DTI ratio signals to lenders that you have a good balance between debt and income. Conversely, a high DTI ratio suggests that an individual may have too much debt for the amount of income earned each month.

For most conventional mortgages, the "magic number" is often 43%. This is generally the highest DTI ratio a borrower can have and still get a qualified mortgage, though some lenders make exceptions or require lower ratios for specific loan products.

Realistic Calculation Example

Let's look at a practical example of how DTI is calculated for a typical household:

Step 1: Gross Monthly Income
Salary: 5,000 / Side Job: 500 = 5,500

Step 2: Total Monthly Debts
Mortgage: 1,200
Car Loan: 350
Student Loan: 200
Credit Card Min: 100
Total: 1,850

Step 3: The Calculation
(1,850 / 5,500) = 0.336
0.336 x 100 = 33.6% DTI

In this example, the borrower has an "Excellent" DTI ratio of 33.6%, putting them in a strong position to qualify for most financial products.

How to Improve Your DTI Ratio

If your ratio is higher than you'd like, there are two primary ways to lower it:

  1. Reduce Monthly Debt: Pay off small balances or consolidate high-interest debt to lower your total monthly minimum payments.
  2. Increase Gross Income: While harder to achieve immediately, raises, bonuses, or additional part-time work will directly lower the ratio by increasing the denominator in the equation.

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