FINANCIAL CALCULATORS
Debt-to-Income (DTI) Calculator
Calculate your debt-to-income ratio for mortgage or loan eligibility.
What is the Debt-to-Income (DTI) Calculator & How does it work?
The Debt-to-Income (DTI) ratio is a financial metric used by lenders to assess the ability of a borrower to repay debts. It compares the total monthly debt payments to the gross monthly income. A lower DTI ratio indicates better creditworthiness.
To calculate your DTI, add up all your monthly debt payments (including mortgage, car loans, student loans, and credit card payments) and divide by your gross monthly income. The result is expressed as a percentage.
To calculate your DTI, add up all your monthly debt payments (including mortgage, car loans, student loans, and credit card payments) and divide by your gross monthly income. The result is expressed as a percentage.
DTI = frac{text{Total Monthly Debt Payments}}{text{Gross Monthly Income}} times 100
DTI = Debt-to-Income Ratio
Total Monthly Debt Payments = Sum of all monthly debt obligations
Gross Monthly Income = Total income before taxes and deductions
Total Monthly Debt Payments = Sum of all monthly debt obligations
Gross Monthly Income = Total income before taxes and deductions
Parameters
Result—
Frequently Asked Questions
What is a good DTI ratio?
A DTI ratio below 36% is generally considered good, while ratios above 40% may be seen as risky by lenders.
How do I calculate my total monthly debt payments?
Add up all your monthly debt obligations including mortgage, car loans, student loans, and credit card payments.
Does the DTI ratio include rent or utilities?
No, the DTI ratio specifically includes only monthly debt payments, not rent, utilities, or other expenses.
How does DTI affect my ability to get a loan?
Lenders use your DTI ratio to assess your ability to manage additional debt. Lower ratios typically indicate better creditworthiness.
Can I improve my DTI ratio?
Yes, you can improve your DTI by paying off high-interest debts, increasing your income, or reducing monthly expenses.
What if I have multiple sources of income?
Include all sources of gross monthly income when calculating your DTI to get an accurate picture of your financial situation.
Is there a maximum DTI ratio for loans?
The acceptable DTI ratio varies by lender and loan type, but generally, ratios above 40% may be considered too high for many lenders.
Results are for informational purposes only and do not constitute professional advice.