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Debt-to-Income (DTI) Ratio Calculator

Total income before taxes

Alimony, personal loans, etc.

Your Debt-to-Income Ratio: 0%

function calculateDTI() { var income = parseFloat(document.getElementById('grossIncome').value) || 0; var housing = parseFloat(document.getElementById('housingPayment').value) || 0; var car = parseFloat(document.getElementById('carPayment').value) || 0; var student = parseFloat(document.getElementById('studentLoan').value) || 0; var card = parseFloat(document.getElementById('creditCard').value) || 0; var other = parseFloat(document.getElementById('otherDebt').value) || 0; if (income <= 0) { alert("Please enter a valid gross monthly income."); return; } var totalDebt = housing + car + student + card + other; var dti = (totalDebt / income) * 100; var resultContainer = document.getElementById('dtiResultContainer'); var dtiValueText = document.getElementById('dtiValue'); var dtiStatusText = document.getElementById('dtiStatus'); var dtiAdviceText = document.getElementById('dtiAdvice'); resultContainer.style.display = "block"; dtiValueText.innerHTML = dti.toFixed(2) + "%"; if (dti 35 && dti <= 43) { dtiStatusText.innerHTML = "Status: Adequate"; dtiStatusText.style.color = "#f57c00"; dtiAdviceText.innerHTML = "This is a manageable level, but some lenders may express concern. You are approaching the maximum limit for many conventional mortgage approvals."; } else { dtiStatusText.innerHTML = "Status: High (Warning)"; dtiStatusText.style.color = "#c62828"; dtiAdviceText.innerHTML = "A DTI above 43% may make it difficult to qualify for a mortgage or personal loan. Consider reducing monthly expenses or paying down credit card balances."; } resultContainer.scrollIntoView({ behavior: 'smooth', block: 'nearest' }); }

Understanding Your Debt-to-Income (DTI) Ratio

The Debt-to-Income (DTI) ratio is a critical financial metric used by lenders, particularly mortgage companies, to evaluate your ability to manage monthly payments and repay debts. It is expressed as a percentage and represents the portion of your gross monthly income that goes toward paying debts.

How is DTI Calculated?

To calculate your DTI ratio, you sum all your monthly debt obligations and divide that total by your gross monthly income (your pay before taxes and deductions). The formula is:

DTI Ratio = (Total Monthly Debt Payments / Gross Monthly Income) x 100

What Does Your DTI Score Mean?

• 35% or Less: This is generally considered ideal. It indicates that you have a healthy balance between debt and income, leaving you with plenty of discretionary cash.
• 36% to 43%: This range is acceptable to many lenders, but you might find it harder to qualify for the most competitive interest rates. 43% is often the maximum DTI allowed for a Qualified Mortgage.
• 44% to 50%: You are considered "debt-heavy." You may struggle to qualify for traditional loans and might need to look into specialized loan programs or focus on aggressive debt reduction.
• Above 50%: This is a high-risk zone. Most of your income is committed to debt, leaving little room for savings or emergency expenses.

Real-World Example

Imagine your gross monthly income is $6,000. Your monthly expenses are:

• Rent/Mortgage: $1,800
• Car Loan: $400
• Student Loan: $300
• Credit Card Minimums: $100

Your total monthly debt is $2,600. Your DTI ratio would be:
($2,600 / $6,000) = 0.433 or 43.3%. This indicates you are right at the threshold for conventional mortgage eligibility.

How to Improve Your DTI Ratio

1. Pay Down Debt: Focus on credit card balances or high-interest personal loans to lower your monthly minimum requirements.
2. Avoid New Debt: If you are planning to apply for a mortgage, avoid taking out new car loans or opening new credit cards.
3. Increase Income: Bonuses, side hustles, or raises increase the denominator of the equation, which lowers the overall percentage.
4. Refinance: Sometimes refinancing a high-interest loan into a lower-interest one can reduce the monthly payment, improving your ratio.