.dti-calculator-container {
font-family: sans-serif;
max-width: 800px;
margin: 20px auto;
padding: 20px;
border: 1px solid #ddd;
border-radius: 8px;
background-color: #f9f9f9;
}
.dti-calculator-container h2 {
text-align: center;
color: #333;
}
.dti-form-group {
margin-bottom: 15px;
display: flex;
justify-content: space-between;
align-items: center;
}
.dti-form-group label {
flex: 1;
font-weight: bold;
color: #555;
}
.dti-form-group input {
flex: 1;
padding: 8px;
border: 1px solid #ccc;
border-radius: 4px;
max-width: 200px;
}
.dti-sub-header {
font-size: 1.1em;
font-weight: bold;
margin-top: 20px;
margin-bottom: 10px;
color: #2c3e50;
border-bottom: 2px solid #ddd;
padding-bottom: 5px;
}
.dti-calc-btn {
display: block;
width: 100%;
padding: 12px;
background-color: #007bff;
color: white;
border: none;
border-radius: 4px;
font-size: 18px;
cursor: pointer;
transition: background-color 0.3s;
}
.dti-calc-btn:hover {
background-color: #0056b3;
}
#dti-result {
margin-top: 25px;
padding: 20px;
border-radius: 8px;
background-color: #e9ecef;
text-align: center;
display: none; /* Hidden by default */
}
#dti-result.good { background-color: #d4edda; color: #155724; }
#dti-result.manageable { background-color: #fff3cd; color: #856404; }
#dti-result.high { background-color: #f8d7da; color: #721c24; }
.dti-result-value {
font-size: 2em;
font-weight: bold;
}
.dti-article {
margin-top: 40px;
line-height: 1.6;
color: #333;
}
.dti-article h3 {
margin-top: 25px;
color: #2c3e50;
}
.dti-article ul {
padding-left: 20px;
}
Determine your Debt-to-Income ratio, a key metric lenders use to assess your ability to manage monthly payments and repay debts. Enter your gross monthly income and all recurring monthly debt obligations below.
function calculateDTI() {
// Get input values. Use 0 if input is empty or invalid.
var income = parseFloat(document.getElementById("grossMonthlyIncome").value) || 0;
var housing = parseFloat(document.getElementById("rentMortgagePayment").value) || 0;
var car = parseFloat(document.getElementById("carLoanPayment").value) || 0;
var student = parseFloat(document.getElementById("studentLoanPayment").value) || 0;
var creditCard = parseFloat(document.getElementById("creditCardMinPayment").value) || 0;
var other = parseFloat(document.getElementById("otherDebtPayment").value) || 0;
var resultDiv = document.getElementById("dti-result");
// Validate income before calculation to avoid division by zero
if (income <= 0) {
resultDiv.style.display = "block";
resultDiv.className = "high"; // Use error coloring
resultDiv.innerHTML = "Please enter a valid Gross Monthly Income greater than zero.";
return;
}
// Calculate Total Monthly Debt
var totalMonthlyDebt = housing + car + student + creditCard + other;
// Calculate DTI Ratio
var dtiRatio = (totalMonthlyDebt / income) * 100;
var dtiFormatted = dtiRatio.toFixed(2);
// Determine status and interpretation
var statusClass = "";
var interpretation = "";
if (dtiRatio <= 36) {
statusClass = "good";
interpretation = "
Lenders view a DTI under 36% very favorably. You likely have a good balance between income and debt.";
} else if (dtiRatio > 36 && dtiRatio <= 43) {
statusClass = "manageable";
interpretation = "
Your DTI is within a typical range for getting approved for a mortgage, but lenders may scrutinize your application more closely.";
} else {
statusClass = "high";
interpretation = "
A DTI over 43% signals higher financial risk to lenders. You may face difficulty securing new credit or loans at favorable rates.";
}
// Display results
resultDiv.style.display = "block";
resultDiv.className = statusClass;
resultDiv.innerHTML =
"
" +
"Total Monthly Debt: $" + totalMonthlyDebt.toFixed(2) + "" +
"" + interpretation + "";
}
Understanding Debt-to-Income (DTI) Ratio
Your Debt-to-Income (DTI) ratio is one of the most critical numbers in personal finance, especially when you are applying for a mortgage, auto loan, or personal loan. Lenders use this ratio to measure your ability to manage the monthly payments and repay the money you plan to borrow.
Simply put, it compares how much you owe each month to how much you earn.
How DTI Is Calculated
The formula for calculating DTI is straightforward:
(Total Monthly Debt Payments / Gross Monthly Income) x 100 = DTI %
Important Note: Use your gross income (income before taxes and deductions), not your take-home pay. For debt payments, only include minimum required payments for recurring debts (housing, credit cards, loans), not living expenses like groceries or utilities.
Example: If your gross monthly income is $6,000, and your total monthly debt payments (mortgage, car, credit cards) equal $2,400, your DTI is ($2,400 / $6,000) = 0.40, or 40%.
What Is a Good DTI Ratio?
While requirements vary by lender and loan type, here are general guidelines for what different DTI tiers mean:
- 36% or Lower: This is considered the "golden standard." Lenders see you as a low-risk borrower. Most conventional mortgage loans are easily attainable at this level.
- 37% to 43%: This is the "manageable" zone. You can likely still qualify for a mortgage (especially FHA loans which often allow higher DTIs), but you might be asked for more documentation or receive a slightly higher interest rate.
- 44% and Higher: This is considered high risk. Lenders may worry that adding a new loan payment will overextend your budget. It becomes significantly harder to get approved for major loans, and if you are, the terms will likely be less favorable.
Front-End vs. Back-End DTI
Sometimes lenders look at two different ratios:
- Front-End Ratio (Housing Ratio): This only calculates your projected housing costs (mortgage principal, interest, taxes, insurance, and HOA fees) divided by your gross income. Lenders typically prefer this to be under 28%.
- Back-End Ratio (Total Debt Ratio): This is what the calculator above determines—your housing costs plus all other consumer debts. This is generally the more important number for loan approval.
How to Lower Your DTI
If your DTI is higher than you'd like, here are steps to improve it before applying for a loan:
- Pay Down Debt: Focus on paying off high-interest credit cards or smaller loan balances to eliminate those monthly obligations entirely.
- Increase Your Income: Consider picking up a side hustle, freelance work, or asking for a raise. Higher gross income immediately lowers your ratio, even if debt stays the same.
- Avoid New Debt: Do not open new credit lines or take on expensive car payments before applying for a mortgage.