Determine your eligibility for mortgages and loans by calculating your debt-to-income ratio based on monthly gross income and recurring debts.
1. Monthly Income
2. Monthly Debts
Your DTI Ratio: 0.00%
Total Monthly Income: $0
Total Monthly Debt: $0
Lender Assessment:
What is Debt-to-Income (DTI) Ratio?
Your Debt-to-Income (DTI) ratio is a personal finance measure that compares an individual's monthly debt payment to their monthly gross income. Lenders use this ratio to assess your ability to manage monthly payments and repay debts.
There are two types of DTI ratios lenders often look at:
Front-End Ratio: The percentage of income that goes toward housing costs (rent, mortgage, insurance).
Back-End Ratio: The percentage of income that goes toward all recurring debt payments, including housing, credit cards, car loans, and student loans. This calculator focuses on the Back-End ratio, which is the standard for most loan approvals.
Interpreting Your DTI Score
Understanding where your percentage falls is crucial for financial planning and loan approval:
35% or less: Generally viewed as favorable. You have manageable debt relative to your income.
36% to 49%: You are managing your debt, but lenders may ask for additional eligibility criteria.
50% or higher: You may have difficulty accessing new credit lines. Lenders may view you as a high-risk borrower.
How to Lower Your DTI Ratio
If your calculation shows a high percentage, consider these strategies before applying for a mortgage or large loan:
Increase your monthly payment on credit cards to lower the principal.
Avoid taking on new debt or opening new credit lines.
Look for ways to increase your gross income (side hustles, overtime, or salary negotiation).
function calculateDTI() {
// 1. Get Income Values
var grossIncome = parseFloat(document.getElementById('grossIncome').value) || 0;
var otherIncome = parseFloat(document.getElementById('otherIncome').value) || 0;
var totalIncome = grossIncome + otherIncome;
// 2. Get Debt Values
var rent = parseFloat(document.getElementById('rentMortgage').value) || 0;
var car = parseFloat(document.getElementById('carLoans').value) || 0;
var student = parseFloat(document.getElementById('studentLoans').value) || 0;
var cards = parseFloat(document.getElementById('creditCards').value) || 0;
var otherDebt = parseFloat(document.getElementById('otherDebts').value) || 0;
var totalDebt = rent + car + student + cards + otherDebt;
// 3. Handle Edge Cases
if (totalIncome === 0) {
alert("Please enter a valid Gross Monthly Income greater than zero.");
return;
}
// 4. Calculate Ratio
var dtiDecimal = totalDebt / totalIncome;
var dtiPercent = (dtiDecimal * 100).toFixed(2);
// 5. Determine Status
var statusSpan = document.getElementById('dtiStatus');
var resultBox = document.getElementById('dti-result-box');
var statusHTML = "";
if (dtiPercent <= 35) {
statusHTML = "Excellent Lenders view you as a low-risk borrower.";
resultBox.style.borderLeftColor = "#46b450";
} else if (dtiPercent <= 43) {
statusHTML = "Manageable You may qualify, but terms might be stricter.";
resultBox.style.borderLeftColor = "#ffb900";
} else {
statusHTML = "High Risk It is recommended to lower your debt before applying.";
resultBox.style.borderLeftColor = "#dc3232";
}
// 6. Update DOM
document.getElementById('finalDtiPercent').innerText = dtiPercent + "%";
document.getElementById('resIncome').innerText = "$" + totalIncome.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resDebt').innerText = "$" + totalDebt.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
statusSpan.innerHTML = statusHTML;
// Show results
resultBox.style.display = "block";
}