Monthly Summary:
Total Monthly Income: $0
Total Monthly Debt: $0
Remaining Income: $0
What is a Debt-to-Income (DTI) Ratio?
Your Debt-to-Income (DTI) ratio is one of the most critical metrics lenders use to assess your creditworthiness. Unlike your credit score, which measures your history of paying bills, your DTI measures your capacity to repay new debt. It represents the percentage of your gross monthly income that goes toward paying your monthly debt obligations.
Lenders generally categorize DTI ratios into three tiers regarding mortgage approval and financial health:
35% or less (Good): This is the ideal range. It shows lenders that you have manageable debt relative to your income and likely have disposable income for savings or emergencies.
36% to 43% (Manageable but Risky): You will likely still qualify for loans, but lenders might see you as a higher risk. You may be offered higher interest rates or required to provide a larger down payment. 43% is often the highest DTI a borrower can have to get a Qualified Mortgage.
44% or higher (High Risk): At this level, taking on new debt is dangerous. Most lenders will deny mortgage applications with a back-end DTI above this threshold because it suggests you are "house poor" or overleveraged.
Front-End vs. Back-End DTI
It is important to distinguish between the two types of ratios calculated by mortgage underwriters:
Front-End Ratio: This only calculates your housing expenses (mortgage principal, interest, taxes, insurance, and HOA fees) divided by your gross income. Lenders typically prefer this to be under 28%.
Back-End Ratio: This is what the calculator above computes. It includes housing expenses PLUS all other recurring debts like credit cards, car loans, and student loans. Lenders prefer this to be under 36% (though up to 43% is often accepted for FHA or conventional loans).
How to Lower Your DTI
If your calculation shows a percentage higher than 43%, consider these strategies before applying for a major loan:
Increase Income: Pick up a side hustle, freelance work, or ask for a raise. Even a small increase in the denominator (income) can significantly drop the ratio.
Snowball Debt Payments: Focus on paying off small balance loans (like credit cards) completely to remove that monthly minimum payment from the calculation.
Avoid New Debt: Do not open new credit lines or finance large purchases like furniture or cars while preparing for a mortgage application.
function calculateDTI() {
// 1. Get Input Values
// Using 'var' as requested.
var incomeInput = document.getElementById('grossIncome');
var housingInput = document.getElementById('rentMortgage');
var carInput = document.getElementById('carLoans');
var studentInput = document.getElementById('studentLoans');
var cardInput = document.getElementById('creditCards');
var otherInput = document.getElementById('otherDebt');
// 2. Parse Values (Handle empty strings as 0)
var income = parseFloat(incomeInput.value) || 0;
var housing = parseFloat(housingInput.value) || 0;
var car = parseFloat(carInput.value) || 0;
var student = parseFloat(studentInput.value) || 0;
var cards = parseFloat(cardInput.value) || 0;
var other = parseFloat(otherInput.value) || 0;
// 3. Validation
if (income <= 0) {
alert("Please enter a valid Gross Monthly Income greater than 0.");
return;
}
// 4. Calculate Total Debt
var totalDebt = housing + car + student + cards + other;
// 5. Calculate DTI Ratio
var dtiRatio = (totalDebt / income) * 100;
var remainingIncome = income – totalDebt;
// 6. Determine Status Logic
var statusText = "";
var statusClass = "";
var resultElement = document.getElementById('dtiStatusDisplay');
if (dtiRatio 35 && dtiRatio <= 43) {
statusText = "Manageable – Moderate Risk";
statusClass = "status-warning";
} else {
statusText = "High – Difficult to Borrow";
statusClass = "status-danger";
}
// 7. Update DOM / HTML Elements
document.getElementById('dtiResult').style.display = 'block';
document.getElementById('dtiPercentDisplay').innerText = dtiRatio.toFixed(1) + "%";
resultElement.innerText = statusText;
resultElement.className = "dti-status " + statusClass;
document.getElementById('summaryIncome').innerText = income.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('summaryDebt').innerText = totalDebt.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('summaryRemaining').innerText = remainingIncome.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Scroll to result
document.getElementById('dtiResult').scrollIntoView({ behavior: 'smooth' });
}