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Debt-to-Income (DTI) Ratio Calculator

Debt-to-Income (DTI) Ratio Calculator

1. Monthly Income

Before taxes and deductions.

2. Monthly Debts

Your Results

Total Monthly Debt:

$0.00

DTI Ratio:

0%

Status:

Understanding Your Debt-to-Income (DTI) Ratio

Your Debt-to-Income (DTI) ratio is one of the most critical metrics lenders use to assess your borrowing power. Whether you are applying for a mortgage, an auto loan, or a personal line of credit, lenders want to know that your income is sufficient to cover your existing debts plus any new payments.

How is DTI Calculated?

The calculation is straightforward but requires accuracy. It is determined by dividing your total monthly debt payments by your gross monthly income (income before taxes). The result is expressed as a percentage.

Formula: (Total Monthly Debt / Gross Monthly Income) x 100 = DTI %

For example, if you pay $1,500 in mortgage/rent, $300 for a car, and $200 in student loans, your total debt is $2,000. If your gross monthly income is $6,000, your DTI is 33%.

What is a Good DTI Ratio?

  • Under 36% (Ideal): Most lenders view this as a healthy ratio. It suggests you have plenty of disposable income and are not over-leveraged. This range often qualifies you for the best interest rates.
  • 36% to 43% (Manageable): This is the standard acceptable range for many mortgages, including Qualified Mortgages. You will likely get approved, though perhaps not at the lowest possible tier of interest rates.
  • Over 43% (Risky): Once you cross this threshold, lenders may worry about your ability to repay new debts. Specific loan programs (like FHA) might allow higher ratios, but it generally signals financial distress.

Front-End vs. Back-End DTI

Front-End Ratio: Considers only your housing expenses (rent/mortgage, property taxes, insurance) relative to your income. Lenders typically prefer this to be under 28%.

Back-End Ratio: Considers all monthly debts combined. This calculator calculates your Back-End Ratio, which is the comprehensive number lenders focus on most.

function calculateDTI() { // 1. Get Input Values by ID matches var income = document.getElementById('grossIncome').value; var housing = document.getElementById('mortgageRent').value; var car = document.getElementById('carLoans').value; var student = document.getElementById('studentLoans').value; var cards = document.getElementById('creditCards').value; var other = document.getElementById('otherDebt').value; // 2. Parse values to Float, handle empty strings as 0 var valIncome = parseFloat(income) || 0; var valHousing = parseFloat(housing) || 0; var valCar = parseFloat(car) || 0; var valStudent = parseFloat(student) || 0; var valCards = parseFloat(cards) || 0; var valOther = parseFloat(other) || 0; // 3. Validation Logic: Only calculate if income is entered if (valIncome <= 0) { // Hide results if income is invalid document.getElementById('dtiResults').style.display = "none"; return; } // 4. Perform Calculation var totalDebt = valHousing + valCar + valStudent + valCards + valOther; var dtiDecimal = totalDebt / valIncome; var dtiPercent = dtiDecimal * 100; // 5. Determine Status Logic var statusColor = ""; var statusText = ""; var message = ""; if (dtiPercent = 36 && dtiPercent <= 43) { statusText = "Manageable"; statusColor = "#f39c12"; // Orange message = "You are within the acceptable range for most lenders, though you should be cautious about taking on significant new debt."; } else { statusText = "High Risk"; statusColor = "#c0392b"; // Red message = "Your DTI is higher than what most lenders prefer (43%). Consider paying down credit card balances or increasing income before applying for major loans."; } // 6. Output to DOM document.getElementById('totalDebtDisplay').innerHTML = "$" + totalDebt.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('dtiRatioDisplay').innerHTML = dtiPercent.toFixed(2) + "%"; document.getElementById('dtiRatioDisplay').style.color = statusColor; var statusElement = document.getElementById('dtiStatus'); statusElement.innerHTML = statusText; statusElement.style.color = statusColor; statusElement.style.fontWeight = "bold"; document.getElementById('dtiMessage').innerHTML = message; // Show the result container document.getElementById('dtiResults').style.display = "block"; }

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