Calculate your DTI ratio to understand your borrowing eligibility.
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0%
Your total monthly debt payments are $0 against an income of $0.
function calculateDTI() {
// 1. Get input values
var income = parseFloat(document.getElementById('monthlyGrossIncome').value);
var housing = parseFloat(document.getElementById('monthlyHousing').value);
var car = parseFloat(document.getElementById('monthlyCar').value);
var student = parseFloat(document.getElementById('monthlyStudent').value);
var cards = parseFloat(document.getElementById('monthlyCreditCards').value);
var other = parseFloat(document.getElementById('monthlyOther').value);
// 2. Validation and Defaulting to 0 if empty
if (isNaN(income) || income <= 0) {
alert("Please enter a valid Monthly Gross Income greater than 0.");
return;
}
if (isNaN(housing)) housing = 0;
if (isNaN(car)) car = 0;
if (isNaN(student)) student = 0;
if (isNaN(cards)) cards = 0;
if (isNaN(other)) other = 0;
// 3. Calculation Logic
var totalMonthlyDebt = housing + car + student + cards + other;
var dtiRatio = (totalMonthlyDebt / income) * 100;
// Round to 2 decimals
dtiRatio = Math.round(dtiRatio * 100) / 100;
// 4. Update UI Results
var resultArea = document.getElementById('results-area');
var percentageDisplay = document.getElementById('dtiPercentage');
var summaryDisplay = document.getElementById('dtiSummary');
var statusBadge = document.getElementById('dtiStatusBadge');
var perspectiveBox = document.getElementById('lenderPerspective');
resultArea.style.display = "block";
percentageDisplay.innerHTML = dtiRatio + "%";
summaryDisplay.innerHTML = "Your total monthly debt payments are $" + totalMonthlyDebt.toLocaleString() + " against a monthly gross income of $" + income.toLocaleString() + ".";
// 5. Determine Status and Advice
var statusClass = "";
var statusText = "";
var adviceHTML = "";
if (dtiRatio <= 35) {
statusClass = "status-excellent";
statusText = "Excellent";
adviceHTML = "Lender Perspective: A DTI under 36% is considered ideal. You demonstrate a strong ability to manage your monthly debts. You are in a prime position to qualify for new credit, mortgages, or loans with the most favorable interest rates.";
} else if (dtiRatio > 35 && dtiRatio <= 43) {
statusClass = "status-good";
statusText = "Good / Manageable";
adviceHTML = "Lender Perspective: Your DTI is within the acceptable range for most lenders. While not perfect, 43% is typically the highest ratio a borrower can have and still get a Qualified Mortgage. You should likely qualify for loans, though perhaps not at the absolute lowest rates.";
} else if (dtiRatio > 43 && dtiRatio <= 50) {
statusClass = "status-concern";
statusText = "High Concern";
adviceHTML = "Lender Perspective: You are approaching a level of debt that makes lenders nervous. Many mortgage lenders will decline applications with a DTI over 43%. You may need to pay down debt or increase income before applying for major financing.";
} else {
statusClass = "status-danger";
statusText = "Critical Risk";
adviceHTML = "Lender Perspective: A DTI over 50% indicates that more than half your gross income goes to debt. This is considered high risk. It will be very difficult to secure new financing without a co-signer or significant collateral. Focus on aggressive debt repayment.";
}
// Apply classes
statusBadge.className = "dti-status " + statusClass;
statusBadge.innerHTML = statusText;
perspectiveBox.innerHTML = adviceHTML;
}
Understanding Your Debt-to-Income (DTI) Ratio
Your Debt-to-Income (DTI) ratio is one of the most critical metrics financial institutions use to evaluate your creditworthiness. While your credit score measures your history of paying bills, your DTI measures your capacity to repay new debt based on your current income.
Unlike a credit score, which is a complex algorithm, DTI is a simple mathematical calculation: it represents the percentage of your gross monthly income that goes toward paying your recurring monthly debts.
Why DTI Matters to Lenders
Lenders want assurance that you aren't "house poor" or over-leveraged. If your fixed monthly expenses eat up too much of your paycheck, you have less buffer for emergencies, increasing the risk of default. Generally:
Mortgages: The "Qualified Mortgage" rule often sets a hard cap at 43% DTI, though some lenders prefer 36% or lower.
Personal Loans: Requirements vary, but a lower DTI always leads to better interest rates.
Auto Loans: Lenders are sometimes more flexible, but a high DTI may require a larger down payment.
How to Calculate DTI: The Formula
The formula used in our calculator above is straightforward:
Example: If your gross monthly income is $6,000 and your total monthly debt payments (rent + car + student loans) equal $2,000, your DTI is 33%.
Note: DTI calculations usually use your gross (pre-tax) income, not your take-home pay. It includes recurring debts like mortgages, credit card minimums, and loan payments, but typically excludes variable living expenses like groceries, utilities, and gas.
Front-End vs. Back-End DTI
In real estate lending, you may hear about two types of ratios:
Front-End Ratio: Only counts housing-related expenses (mortgage, HOA, property tax, insurance) against your income. Lenders prefer this to be under 28%.
Back-End Ratio: Counts ALL recurring debts (housing + cars + cards + loans). This is the number our calculator provides, and lenders prefer this under 36% to 43%.
Strategies to Lower Your DTI
If your result falls into the "High Concern" or "Critical Risk" categories, consider these steps before applying for a major loan:
Increase Income: This is the denominator in the equation. A side hustle, raise, or including a spouse's income (if co-signing) can immediately drop your DTI.
Snowball Debt Payments: Focus on eliminating the debt with the highest monthly payment relative to its balance, or pay off small balances entirely to remove that monthly obligation from the calculation.
Avoid New Debt: Do not open new credit cards or finance large purchases like furniture or cars in the months leading up to a mortgage application.
Refinance: If interest rates have dropped, refinancing a high-interest loan could lower your monthly payment obligation, thus lowering your DTI.