Debt-to-Income (DTI) Ratio Calculator
Calculate your financial health and see what lenders think of your borrowing capacity.
Your DTI Ratio is:
0%
What is a Debt-to-Income (DTI) Ratio?
Your Debt-to-Income (DTI) ratio is a personal finance measure that compares your total monthly debt payments to your gross monthly income. Lenders, especially mortgage providers and personal loan companies, use this percentage to determine your ability to manage monthly payments and repay borrowed money.
The DTI Ratio Formula
Calculating your DTI is straightforward. Use the following formula:
(Total Monthly Debt Payments รท Gross Monthly Income) x 100 = DTI %
Note: Gross monthly income is your pay before taxes and other deductions are taken out.
Understanding Your Results
- 35% or Less (Good): This is generally considered a healthy debt level. You likely have enough disposable income to qualify for most loans.
- 36% to 49% (Fair): You are managing your debt, but lenders may be more cautious. You might face higher interest rates or stricter requirements.
- 50% or Higher (Poor): Lenders see this as a high risk. You may have trouble covering unexpected expenses or qualifying for new credit.
Example Calculation
Suppose you earn $6,000 per month (Gross). Your monthly expenses include a $1,500 mortgage, a $400 car payment, and $100 in credit card minimums. Your total debt is $2,000.
$2,000 / $6,000 = 0.333 or 33.3% DTI.