Calculate your DTI to assess your mortgage eligibility and financial health.
1. Monthly Income (Before Tax)
2. Monthly Debt Obligations
Total Monthly Debt:$0
0%
function calculateDTI() {
// Retrieve inputs
var incomeInput = document.getElementById('grossIncome');
var rentInput = document.getElementById('rentMortgage');
var carInput = document.getElementById('carLoans');
var studentInput = document.getElementById('studentLoans');
var cardsInput = document.getElementById('creditCards');
var personalInput = document.getElementById('personalLoans');
var otherInput = document.getElementById('otherDebts');
// Parse values (default to 0 if empty)
var income = parseFloat(incomeInput.value) || 0;
var rent = parseFloat(rentInput.value) || 0;
var car = parseFloat(carInput.value) || 0;
var student = parseFloat(studentInput.value) || 0;
var cards = parseFloat(cardsInput.value) || 0;
var personal = parseFloat(personalInput.value) || 0;
var other = parseFloat(otherInput.value) || 0;
// Validation
if (income <= 0) {
alert("Please enter a valid Gross Monthly Income greater than 0.");
return;
}
// Calculations
var totalDebt = rent + car + student + cards + personal + other;
var dtiRatio = (totalDebt / income) * 100;
var dtiFinal = dtiRatio.toFixed(2);
// Update UI Elements
var resultDiv = document.getElementById('dtiResult');
var displayTotalDebt = document.getElementById('displayTotalDebt');
var displayDTI = document.getElementById('displayDTI');
var dtiBar = document.getElementById('dtiBar');
var statusBadge = document.getElementById('dtiStatusBadge');
var messageP = document.getElementById('dtiMessage');
// Show Results container
resultDiv.style.display = "block";
displayTotalDebt.innerHTML = "$" + totalDebt.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
displayDTI.innerHTML = dtiFinal + "%";
// Logic for Color and Messaging
var color = "";
var statusText = "";
var advice = "";
if (dtiRatio 35 && dtiRatio 43 && dtiRatio 100 ? 100 : dtiRatio;
dtiBar.style.width = barWidth + "%";
dtiBar.style.backgroundColor = color;
}
Understanding Debt-to-Income (DTI) Ratio
The Debt-to-Income (DTI) ratio is one of the most critical metrics lenders use to evaluate your creditworthiness. Unlike your credit score, which tracks your payment history, the DTI ratio measures your ability to manage monthly payments and repay debts based on your current income.
Whether you are applying for a mortgage, a car loan, or a personal line of credit, lenders want to ensure you aren't overleveraged. A lower DTI ratio generally signals that you have a good balance between debt and income.
The Formula: DTI = (Total Monthly Debt Payments / Gross Monthly Income) x 100
What is a Good DTI Ratio?
While requirements vary by lender and loan type, general guidelines categorize DTI ratios as follows:
35% or less: Considered excellent. You have manageable debt and plenty of disposable income.
36% to 43%: Considered good. This is often the "sweet spot" for mortgage approval, though you should be cautious about taking on new debt.
44% to 50%: Considered high risk. You may struggle to find lenders, or you may be offered loans with higher interest rates.
Above 50%: Considered critical. Most traditional lenders will deny mortgage applications at this level, as it suggests you have little room for financial error.
The 43% Rule for Mortgages
In the United States, 43% is a magic number in the mortgage industry. It is generally the maximum DTI ratio a borrower can have to get a "Qualified Mortgage." A Qualified Mortgage is a category of loans that have certain stable features that help make it more likely that you'll be able to afford your loan.
Front-End vs. Back-End Ratio
When calculating DTI, you may hear terms like "front-end" and "back-end" ratios:
Front-End Ratio: This only calculates your housing expenses (mortgage principal, interest, taxes, and insurance) divided by your gross income. Lenders typically prefer this to be under 28%.
Back-End Ratio: This is the calculation used in the tool above. It includes housing expenses plus all other monthly debt obligations (credit cards, student loans, car payments). Lenders generally cap this at 36-43%.
What is Included in DTI?
When using a Debt-to-Income Ratio Calculator, ensure you include the following monthly payments:
Future or current mortgage/rent payments (including HOA fees, taxes, and insurance).
Auto loan or lease payments.
Minimum monthly credit card payments (not the total balance).
Student loan payments.
Alimony or child support payments.
Personal loan repayments.
Note: Generally, monthly expenses like groceries, utilities, gas, and entertainment are not included in the DTI calculation.
How to Lower Your DTI Ratio
If your calculation shows a high percentage, here are steps to improve your standing before applying for a loan:
Increase Your Income: This could be through a raise, a side hustle, or a co-borrower.
Pay Down High-Interest Debt: Aggressively paying off credit cards lowers your monthly minimum obligations.
Avoid New Debt: Do not open new credit lines or finance large purchases before a mortgage application.
Refinance Loans: extending the term of a loan might lower the monthly payment, thereby lowering your DTI (though you may pay more interest over time).