How to use this calculator
- Enter your Gross monthly income before taxes and deductions.
- Fill in Rent or mortgage payment, Car loan payments, Minimum credit card payments and Student loan payments, using the monthly amount you actually owe.
- Add anything else with a fixed monthly bill under Other debt payments, such as personal loans or child support.
- Read your Debt-to-income ratio, the Housing ratio (front-end) and the Income left after debts, then try removing a debt to see the effect.
How debt-to-income ratio is calculated
Your debt-to-income ratio (DTI) compares what you must pay each month on debts with what you earn before tax. It is a snapshot of how much of your income is already spoken for.
DTI = (Housing + Car + Cards + Student + Other) ÷ Gross monthly income × 100- Housing = rent or the monthly mortgage payment
- Car, Cards, Student, Other = the required monthly payment on each debt (for cards, the minimum due, not the balance)
- Gross monthly income = pay before taxes and deductions
Lenders usually calculate two versions. The front-end ratio counts only housing costs. The back-end ratio, which is the headline number here, counts housing plus every other recurring debt.
Example: a 45% ratio and what changes it
Say you earn $5,500 a month before tax and pay $1,650 rent, $420 on a car loan, $120 in minimum card payments and $280 on student loans. Total debt payments are $2,470, so the calculator shows a DTI of 44.9%. Your housing ratio is exactly 30%, and $3,030 of income is left after debts.
At that level the calculator flags the ratio as high. Now suppose the car loan is paid off. With the same income and the remaining $2,050 in payments, DTI falls to 37.3% and income left after debts rises to $3,450. One loan moved you from a hard approval into the range many lenders still accept.
How to read your result
The calculator uses simple bands: up to 36% is healthy, up to 43% is manageable, up to 50% is high and above that is very high. These are rules of thumb, not the policy of any one lender. Requirements differ by loan type, credit score, down payment and country.
Look at the two ratios together. A person at 32% housing and 40% total is carrying heavy non-housing debt. A person at 12% housing and 40% total may simply have a cheap home and plenty of room to refinance or pay down other loans.
Ways to lower your ratio
There are only two levers: smaller monthly debt payments or higher income. Paying off a loan removes its whole payment, so the loan with the highest payment relative to its balance is often the best one to clear first. See the loan payoff calculator and the credit card payoff calculator for timelines.
Avoid opening new credit before applying for a mortgage, because a new car loan adds a payment immediately. Refinancing to a longer term lowers the payment and the ratio, but it usually raises total interest, so compare both numbers in the loan calculator.
What the calculator leaves out
DTI ignores everyday costs such as food, utilities, insurance, childcare and taxes, so a ratio that passes a lender's test may still feel tight in real life. Check the result against your own budget as well.
Lenders may count income and debts differently from this page. Some use only income they can document, include property tax and insurance in housing, or add a payment for a debt you co-signed. Treat the figure as an estimate and ask your lender how they calculate it. If you are planning a home purchase, the home affordability calculator works from the same ratio.
Frequently asked questions
What is a good debt-to-income ratio?
Below about 36% is generally seen as healthy, and many lenders will approve loans up to roughly 43%. Anything above 50% makes new credit hard to get.
Should I use gross or net income?
Gross income, which is your pay before tax. Lenders measure DTI against gross, so using take-home pay would overstate your ratio.
Do utilities, groceries and insurance count as debt?
No. DTI counts only contractual debt payments such as housing, loans and card minimums. Everyday living costs are not included.
Does DTI affect my credit score?
Not directly, because credit bureaus do not see your income. The balances and payments behind it do show on your credit report, and lenders review both.
Do I enter the card balance or the minimum payment?
Enter the minimum monthly payment. Lenders count the required payment, not what you owe in total.