Debt-to-Income (DTI) Ratio Calculator
Calculate your DTI ratio to understand your financial health and likelihood of loan approval.
Your Results
Total Monthly Debt: $0.00
Your DTI Ratio: 0.00%
function calculateDTI() {
// Get input values using var
var grossIncomeStr = document.getElementById("dti-gross-income").value;
var mortgageRentStr = document.getElementById("dti-mortgage-rent").value;
var autoLoansStr = document.getElementById("dti-auto-loans").value;
var studentLoansStr = document.getElementById("dti-student-loans").value;
var creditCardsStr = document.getElementById("dti-credit-cards").value;
var otherDebtStr = document.getElementById("dti-other-debt").value;
// Parse values to floats, handle empty strings as 0
var grossIncome = parseFloat(grossIncomeStr) || 0;
var mortgageRent = parseFloat(mortgageRentStr) || 0;
var autoLoans = parseFloat(autoLoansStr) || 0;
var studentLoans = parseFloat(studentLoansStr) || 0;
var creditCards = parseFloat(creditCardsStr) || 0;
var otherDebt = parseFloat(otherDebtStr) || 0;
// Calculate Total Monthly Debt
var totalMonthlyDebt = mortgageRent + autoLoans + studentLoans + creditCards + otherDebt;
// Edge case handling: Ensure income is positive to avoid division by zero or negative income
if (grossIncome <= 0) {
alert("Please enter a valid Gross Monthly Income greater than zero to calculate DTI.");
document.getElementById("dti-results").style.display = "none";
return;
}
// Calculate DTI Ratio
var dtiRatio = (totalMonthlyDebt / grossIncome) * 100;
// Display results
document.getElementById("result-total-debt").innerText = totalMonthlyDebt.toFixed(2);
document.getElementById("result-dti-ratio").innerText = dtiRatio.toFixed(2);
// Interpretation logic based on standard mortgage industry guidelines
var interpretationDiv = document.getElementById("dti-interpretation");
var interpretationText = "";
var bgColor = "";
var textColor = "";
if (dtiRatio = 36 && dtiRatio 43 && dtiRatio <= 50) {
interpretationText = "Caution: Your DTI is getting high. It may be harder to qualify for a mortgage, or you may face higher interest rates.";
bgColor = "#ffeeba";
textColor = "#856404";
} else {
interpretationText = "High Risk: Lenders generally consider a DTI above 50% as high risk. You may have difficulty qualifying for new credit.";
bgColor = "#f8d7da";
textColor = "#721c24";
}
interpretationDiv.innerText = interpretationText;
interpretationDiv.style.backgroundColor = bgColor;
interpretationDiv.style.color = textColor;
// Show results container
document.getElementById("dti-results").style.display = "block";
}
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.calculator-form .input-group { margin-bottom: 15px; }
.calculator-form label { display: block; margin-bottom: 5px; font-weight: bold; }
.calculator-form input[type="number"] { width: 100%; padding: 10px; border: 1px solid #ccc; border-radius: 4px; box-sizing: border-box; }
.calc-btn { width: 100%; padding: 12px; background-color: #007bff; color: white; border: none; border-radius: 4px; cursor: pointer; font-size: 16px; font-weight: bold; transition: background-color 0.3s ease; }
.calc-btn:hover { background-color: #0056b3; }
h3 { margin-top: 25px; margin-bottom: 15px; border-bottom: 2px solid #eee; padding-bottom: 10px; }
Understanding Your Debt-to-Income Ratio
Your Debt-to-Income (DTI) ratio is one of the most critical metrics lenders use when evaluating your creditworthiness for mortgages, auto loans, and other forms of credit. It compares how much you owe each month to how much you earn.
Why DTI Matters for Lenders
Lenders use the DTI ratio to assess your ability to repay a new loan. A lower ratio suggests that you have sufficient income remaining after paying your debts to comfortably handle new payments. Conversely, a high DTI indicates that a large portion of your income is already committed to debt repayment, increasing the risk that you might default on a new loan if you encounter financial difficulties.
How is DTI Calculated?
The formula is relatively straightforward. It involves summing up all your minimum recurring monthly debt payments and dividing that total by your gross monthly income (income before taxes and deductions).
The debts typically included are:
- Rent or Mortgage payments (including property taxes and insurance)
- Car loan payments
- Student loan minimum payments
- Credit card minimum monthly payments
- Other fixed monthly debts like alimony or child support
Realistic DTI Example
Let's look at a realistic scenario using the calculator above:
- Gross Monthly Income: $6,000
- Mortgage/Rent: $1,800
- Auto Loan: $450
- Student Loans: $250
- Credit Card Minimums: $200
First, calculate the Total Monthly Debt: $1,800 + $450 + $250 + $200 = $2,700.
Next, divide the total debt by the gross income: $2,700 / $6,000 = 0.45.
Finally, multiply by 100 to get the percentage: 0.45 * 100 = 45% DTI Ratio.
In this example, a 45% DTI is generally considered on the higher end, and while you might still qualify for some loans, lenders might require higher credit scores or charge higher interest rates to offset the perceived risk.
Interpreting Your Results
- 35% or less: Considered excellent. You have manageable debt and lenders will view you favorably.
- 36% to 43%: This range is often acceptable for many conventional mortgages, known as a "Qualified Mortgage."
- 44% to 50%: You may face difficulties getting approved for standard loans without compensating factors like a high down payment or excellent credit score.
- Over 50%: Most lenders view this as high risk, and it can be very difficult to obtain new credit.