Calculate your DTI to understand your borrowing power.
Monthly Debt Obligations
Your DTI Ratio:
Total Monthly Debt: $
function calculateDTI() {
// Get inputs using var as requested, ensuring exact ID matches
var grossIncomeInput = document.getElementById("dtiGrossIncome").value;
var mortgageRentInput = document.getElementById("dtiMortgageRent").value;
var carLoansInput = document.getElementById("dtiCarLoans").value;
var studentLoansInput = document.getElementById("dtiStudentLoans").value;
var creditCardsInput = document.getElementById("dtiCreditCards").value;
var otherDebtInput = document.getElementById("dtiOtherDebt").value;
// Parse values, using || 0 to handle empty or non-numeric inputs gracefully
var grossIncome = parseFloat(grossIncomeInput) || 0;
var mortgageRent = parseFloat(mortgageRentInput) || 0;
var carLoans = parseFloat(carLoansInput) || 0;
var studentLoans = parseFloat(studentLoansInput) || 0;
var creditCards = parseFloat(creditCardsInput) || 0;
var otherDebt = parseFloat(otherDebtInput) || 0;
// Handle edge case: Income must be greater than zero
if (grossIncome <= 0) {
alert("Please enter a Monthly Gross Income greater than zero to calculate DTI.");
return;
}
// COMPLETE CALCULATION LOGIC
var totalMonthlyDebt = mortgageRent + carLoans + studentLoans + creditCards + otherDebt;
var dtiRatioDecimal = totalMonthlyDebt / grossIncome;
var dtiRatioPercentage = dtiRatioDecimal * 100;
// Determine analysis based on standard lending guidelines
var analysisText = "";
var resultColor = "#444";
if (dtiRatioPercentage = 36 && dtiRatioPercentage 43 && dtiRatioPercentage <= 50) {
analysisText = "High.Lenders may consider you higher risk; approval might be difficult.";
resultColor = "#fd7e14"; // Orange
} else {
analysisText = "Very High. It may be very difficult to secure new credit or mortgages.";
resultColor = "#dc3545"; // Red
}
// Display Results
var resultDiv = document.getElementById("dtiResult");
var formattedResultSpan = document.getElementById("dtiFormattedResult");
var analysisParagraph = document.getElementById("dtiAnalysis");
var totalDebtSpan = document.getElementById("totalMonthlyDebtDisplay");
formattedResultSpan.innerHTML = dtiRatioPercentage.toFixed(2) + "%";
analysisParagraph.innerHTML = analysisText;
analysisParagraph.style.color = resultColor;
totalDebtSpan.innerHTML = totalMonthlyDebt.toFixed(2);
resultDiv.style.display = "block";
}
Understanding Debt-to-Income (DTI) Ratio
Your Debt-to-Income (DTI) ratio is a critical personal finance percentage that compares your total monthly debt payments to your total gross monthly income (your income before taxes and deductions). Lenders use this ratio as a primary indicator of your ability to manage monthly payments and repay debts.
Why DTI Matters for Lenders
When you apply for a major loan, such as a mortgage or auto financing, lenders want assurance that you aren't overextended. A lower DTI ratio demonstrates a good balance between debt and income, suggesting you have sufficient cash flow to handle a new loan payment. Conversely, a high DTI signals financial stress, increasing the lender's risk that you might default on the loan.
The Two Types of DTI in Mortgage Lending
While the calculator above provides a general overview, mortgage lenders often look at two specific types:
Front-End Ratio: This only counts housing-related costs (principal, interest, taxes, insurance, and HOA fees) divided by gross income. Lenders typically prefer this to be under 28%.
Back-End Ratio: This is what the calculator above computes. It includes housing costs plus all other recurring monthly debts like credit cards, student loans, and car payments. Most Conventional mortgage lenders look for a back-end ratio of 43% or lower, though some government-backed loans (like FHA) may allow higher ratios in certain circumstances.
Realistic Example Calculation
Let's imagine a borrower named Alex. To determine their DTI, we look at their monthly finances:
Next, divide total debt by gross income: $2,400 / $6,000 = 0.40.
Finally, multiply by 100 to get the percentage: 0.40 * 100 = 40% DTI Ratio. This falls into a generally manageable range, though lowering it could improve loan terms.
How to Improve Your DTI Ratio
If your DTI is higher than preferred, you can improve it in two ways: increasing your income or decreasing your debt. The most effective strategy usually involves aggressively paying down revolving debt, such as high-interest credit card balances, which eliminates the monthly minimum payment obligation from the calculation.