Debt-to-Income Ratio Calculator
Calculate your debt-to-income (DTI) ratio to understand how much of your gross income goes toward debt payments. Lenders use this figure to evaluate loan and mortgage eligibility.
About this calculator
The debt-to-income ratio (DTI) measures the percentage of your gross monthly income that is consumed by debt obligations. The formula is: DTI = (monthlyDebtPayments / grossMonthlyIncome) × 100. Monthly debt payments typically include mortgage or rent, car loans, student loans, minimum credit card payments, and any other recurring debt. Gross monthly income is your pre-tax earnings before deductions. Lenders use DTI to assess credit risk: a DTI below 36% is generally considered healthy, 37–49% signals manageable but elevated debt, and 50% or above is seen as financially stressed. For conventional mortgage approval, most lenders require a DTI of 43% or lower, while the best rates go to borrowers under 36%.
How to use
Say your gross monthly income is $6,000. Your monthly debt payments are: mortgage $1,200, car loan $350, student loan $250, and minimum credit card payment $100, totaling $1,900. Plug into the formula: ($1,900 / $6,000) × 100 = 31.67%. Your DTI is approximately 31.7%, which falls in the healthy range below 36% and would likely satisfy most lenders' requirements for a new loan or mortgage refinance.
Frequently asked questions
What is a good debt-to-income ratio for getting approved for a mortgage?
Most conventional mortgage lenders prefer a DTI of 43% or below, with the best interest rates typically reserved for borrowers at 36% or lower. FHA loans may allow DTI up to 50% in some cases, but this comes with stricter scrutiny of other financial factors. A lower DTI signals to lenders that you have comfortable income to manage new debt responsibly. If your DTI is too high, paying down existing debt or increasing income before applying can significantly improve your chances.
How does a high debt-to-income ratio affect my ability to borrow money?
A high DTI — generally above 43% — makes lenders wary because it suggests a large portion of your income is already committed to existing obligations, leaving less room for new payments. You may face outright loan denial, higher interest rates, or be required to provide a larger down payment to offset the risk. It can also affect personal loans and car financing, not just mortgages. Reducing your DTI by paying off smaller debts first (the debt avalanche or snowball method) can open up better borrowing options.
What monthly payments should I include in my debt-to-income ratio calculation?
Include all recurring monthly debt obligations: mortgage or rent, auto loans, student loans, minimum credit card payments, personal loans, alimony, and child support. Do not include everyday living expenses like groceries, utilities, or subscriptions, as these are not debt payments. Some lenders focus on a 'front-end' DTI that only looks at housing costs, while the 'back-end' DTI includes all debts — the back-end figure is what most lenders use for approval decisions. Using gross (pre-tax) income, not net income, is the standard for this calculation.