Determine your borrowing power and financial health instantly.
1. Monthly Income
2. Monthly Debt Payments
Your Financial Snapshot
Total Monthly Debt:$0.00
Gross Monthly Income:$0.00
DTI Ratio: 0%
What is Debt-to-Income (DTI) Ratio?
Your Debt-to-Income (DTI) ratio is a critical financial metric used by lenders to assess your ability to manage monthly payments and repay debts. It represents the percentage of your gross monthly income that goes toward paying debts such as rent, mortgage, credit cards, and student loans.
Unlike your credit score, which measures your credit history, the DTI ratio strictly measures your monthly cash flow leverage. A lower DTI ratio indicates that you have a good balance between debt and income, making you a more attractive candidate for loans and mortgages.
How to Calculate Your DTI Ratio
The formula for calculating DTI is straightforward but requires accuracy regarding your monthly obligations. The calculation follows this structure:
Example: If your monthly income is $6,000 and your total monthly debt payments (rent, car, cards) equal $2,000, your DTI is 33% ($2,000 รท $6,000 = 0.333).
Understanding Your Results: What is a Good DTI?
35% or Less (Excellent): This is the ideal range. Lenders view you as a safe borrower with plenty of disposable income. You likely qualify for the best interest rates.
36% to 43% (Good/Manageable): You are still in a borrowable range for most mortgages, but lenders may require more documentation. The 43% mark is often the cutoff for "Qualified Mortgages."
44% to 49% (High Risk): You may struggle to find a lender for a home loan, or you may be offered higher interest rates. It signals potential financial stress.
50% or Higher (Critical): At this level, more than half your income goes to debt. Mortgage options are extremely limited, and immediate debt reduction strategies are recommended.
Why DTI Matters for Home Buying
When applying for a mortgage, lenders look at two types of DTI: the Front-End Ratio (housing costs only) and the Back-End Ratio (all debts combined). This calculator computes your Back-End Ratio, which is generally the more important figure for loan approval. Most lenders adhere to the "43% rule," meaning your total monthly debts, including the new mortgage payment, should not exceed 43% of your gross income.
function calculateDTI() {
// 1. Get Input Values
var grossIncome = parseFloat(document.getElementById('grossIncome').value);
var rent = parseFloat(document.getElementById('rentPayment').value);
var car = parseFloat(document.getElementById('carPayment').value);
var student = parseFloat(document.getElementById('studentLoans').value);
var cc = parseFloat(document.getElementById('creditCards').value);
var other = parseFloat(document.getElementById('otherDebt').value);
// 2. Validate Inputs (Treat NaN as 0 for debts, but check Income)
if (isNaN(rent)) rent = 0;
if (isNaN(car)) car = 0;
if (isNaN(student)) student = 0;
if (isNaN(cc)) cc = 0;
if (isNaN(other)) other = 0;
if (isNaN(grossIncome) || grossIncome <= 0) {
alert("Please enter a valid Gross Monthly Income greater than 0.");
return;
}
// 3. Perform Calculations
var totalDebt = rent + car + student + cc + other;
var dtiRatio = (totalDebt / grossIncome) * 100;
// 4. Update Result Elements
document.getElementById('displayTotalDebt').innerText = '$' + totalDebt.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('displayTotalIncome').innerText = '$' + grossIncome.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('finalDtiPercent').innerText = dtiRatio.toFixed(2) + '%';
// 5. Determine Status Message
var statusBox = document.getElementById('dtiStatus');
var recBox = document.getElementById('dtiRecommendation');
var resultsContainer = document.getElementById('dtiResultBox');
// Logic for status
if (dtiRatio 35 && dtiRatio 43 && dtiRatio <= 50) {
statusBox.style.backgroundColor = '#f8d7da';
statusBox.style.color = '#721c24';
statusBox.innerText = "Status: High Risk";
recBox.innerText = "You are above the standard 43% limit. Buying a home may be difficult without paying down debt first.";
} else {
statusBox.style.backgroundColor = '#e74c3c';
statusBox.style.color = '#fff';
statusBox.innerText = "Status: Critical";
recBox.innerText = "More than half your income goes to debt. Consider debt consolidation or aggressive repayment strategies immediately.";
}
// 6. Show Results
resultsContainer.style.display = 'block';
// Scroll to results
resultsContainer.scrollIntoView({behavior: "smooth"});
}