Debt-to-Income Ratio Calculator
Calculate your DTI ratio to understand your financial health and loan eligibility
Monthly Income
Monthly Debt Payments
Your DTI Results
Enter your financial information to get personalized recommendations.
Debt-to-Income Ratio Calculator: Definition, How to Use & FAQ
What is Debt-to-Income Ratio (DTI)?
Your Debt-to-Income Ratio (DTI) is one of the most important financial metrics that lenders use to evaluate your creditworthiness. It represents the percentage of your monthly gross income that goes toward paying your debts. Understanding your DTI is crucial whether you’re applying for a mortgage, car loan, or any other type of credit.
Why DTI Matters
Lenders use DTI to assess your ability to manage monthly payments and repay debts. A lower DTI ratio indicates that you have a good balance between debt and income, making you less risky to lenders. Most financial experts recommend keeping your DTI below 36%, with no more than 28% of that debt going toward housing expenses.
How to Use Our DTI Calculator
Our advanced Debt-to-Income Ratio Calculator makes it easy to understand your financial health in just a few simple steps:
Step 1: Enter Your Monthly Income
Start by inputting all sources of your monthly income:
Gross Monthly Salary: Your pre-tax income from your primary job
Bonuses & Commissions: Additional compensation from your employer
Freelance & Side Income: Money from side gigs or freelance work
Rental & Investment Income: Passive income from properties or investments
Other Income: Any additional regular income sources
The calculator automatically sums these amounts to show your total monthly income.
Step 2: Input Your Monthly Debts
Next, enter all your monthly debt obligations:
Mortgage/Rent Payment: Your monthly housing costs
Credit Card Payments: Total minimum payments across all cards
Auto Loans: Monthly car payment amounts
Student Loans: Education loan payments
Personal Loans: Installment loan payments
Other Debts: Any additional recurring debt payments
The calculator will total these to determine your monthly debt burden.
Step 3: Review Your Results
Instantly see your:
Front-End Ratio: Housing costs divided by gross income
Back-End Ratio: Total debts divided by gross income
DTI Percentage: Your overall debt-to-income ratio
Interpretation: What your ratio means for loan eligibility
Recommendations: Personalized advice based on your results
Step 4: Take Action
Use your results to make informed financial decisions. The calculator provides specific recommendations based on whether your DTI is excellent, good, or needs improvement.
Understanding Your DTI Results
Excellent (Below 36%)
Congratulations! You have a healthy debt-to-income ratio. Most lenders will view you as a low-risk borrower. You’re likely to qualify for the best interest rates and loan terms.
Good (36% to 43%)
Your DTI is within acceptable ranges for most lenders. While you may not get the absolute best rates, you should still qualify for most loans. Consider paying down debt to improve your ratio.
Poor (Above 43%)
You may face challenges getting approved for new credit. Focus on debt reduction strategies and consider speaking with a financial advisor about improving your financial situation.
Frequently Asked Questions (FAQ)
What’s the difference between front-end and back-end DTI?
Front-end DTI only includes housing-related expenses (mortgage/rent, property taxes, insurance). Back-end DTI includes all debt obligations (housing, credit cards, loans, etc.). Lenders typically focus more on back-end DTI.
What DTI ratio do I need for a mortgage?
Most conventional lenders prefer:
Front-end DTI: 28% or less
Back-end DTI: 36% or less
FHA loans: May accept up to 43% back-end DTI
Some programs: May allow up to 50% with strong compensating factors
How can I improve my DTI ratio?
Increase your income through raises, side jobs, or passive income
Pay down existing debts starting with high-interest accounts
Avoid taking on new debt while you improve your ratio
Consider debt consolidation to lower monthly payments
Should I include utilities in my DTI calculation?
No, utilities and other living expenses aren’t considered debt for DTI calculations. Only include obligations that would appear on your credit report.
How often should I check my DTI?
We recommend checking your DTI:
Quarterly as part of regular financial health checks
Before applying for any major loan
After significant financial changes (job change, large purchase, debt payoff)
Does DTI affect my credit score?
While DTI doesn’t directly impact your credit score, it closely relates to your credit utilization ratio, which does affect your score. High DTI often correlates with high credit utilization.
What income should I include for DTI?
Include all verifiable, consistent income sources:
Gross wages/salary (before taxes)
Bonuses and commissions (if consistent)
Investment income
Rental income
Alimony or child support (if you choose to include it)
Social Security or disability payments
Are there any debts I shouldn’t include?
Generally exclude:
Utilities and living expenses
Insurance premiums
Medical bills not in collections
Expenses that don’t represent recurring debt
Can I get a loan with a high DTI?
It’s possible but challenging. You may need:
Strong compensating factors (excellent credit, large down payment)
Higher interest rates
Special loan programs
A co-signer
Why is my DTI different from what lenders calculate?
Lenders may use slightly different calculations, considering:
Different income verification methods
Specific debt inclusion rules
Potential future obligations
Varying definitions of “recurring” debt
Tips for Using the Calculator Effectively
Be accurate with your numbers for the most useful results
Update regularly as your financial situation changes
Use the share feature to discuss results with financial advisors
Try different scenarios to see how financial decisions affect your ratio
Save your results to track progress over time
Take Control of Your Financial Health Today
Understanding your Debt-to-Income Ratio is the first step toward better financial management. Whether you’re planning to apply for a loan or simply want to improve your financial health, our DTI calculator provides the insights you need to make informed decisions.
Ready to check your DTI? Use our calculator above and take the first step toward financial clarity!