Your debt-to-income ratio (DTI) is all your monthly debt payments divided by your gross monthly income. The Consumer Financial Protection Bureau uses this example: a $1,500 mortgage, a $100 auto loan and $400 of other debts total $2,000 a month; with $6,000 of gross monthly income, DTI is 33%. Lenders use DTI to judge whether you can take on a new payment.
This calculator gives the overall (back-end) DTI and the housing-only (front-end) ratio, and shows how much monthly payment room you would have under 36% and 43%. Those are common reference points, but the CFPB notes that DTI limits differ by loan product and lender.
How to use the debt-to-income ratio calculator
- Enter gross income before taxes and deductions, monthly or yearly.
- Enter your rent or mortgage payment, including property tax, insurance and HOA if they are part of the payment.
- Enter the minimum required payment on each other debt: auto, student, credit card and other loans.
- Leave out everyday expenses such as utilities, groceries and phone bills; they are not debt payments for DTI.
Formula
Worked example
The CFPB example: $1,500 mortgage, $100 auto loan, $400 of other debts, $6,000 gross monthly income.
- Total debt payments: $1,500 + $100 + $400 = $2,000.
- DTI: 2,000 ÷ 6,000 = 33.3%.
- Front-end ratio: 1,500 ÷ 6,000 = 25.0%.
- Room under 36%: $6,000 × 0.36 − $2,000 = $160 a month. Under 43%: $580.
Lowering your DTI
DTI falls when debt payments fall or income rises. Paying off a small balance that has a minimum payment helps more than paying down a large balance whose payment does not change. The credit card payoff calculator shows how fast a card can be cleared. Before applying for a new loan, run the payment through the mortgage calculator or auto loan calculator and add it here to see the DTI after borrowing. Convert an hourly wage to monthly gross income with the hourly to salary calculator.
Second example
You earn $85,000 a year, or $7,083 a month before tax. Your monthly debts are a $2,100 mortgage payment (including taxes and insurance), a $450 car loan, a $250 student loan and $90 in minimum credit card payments, totaling $2,890.
- Back-end DTI = $2,890 ÷ $7,083 = 40.8%.
- Front-end (housing only) = $2,100 ÷ $7,083 = 29.6%.
Paying off the $90 card minimum would only lower the back-end ratio to 39.5%; paying off the car would lower it to 34.4%. Large fixed payments move DTI most. Use the loan calculator to see how a different term changes a payment.
Caveats and assumptions
- Lenders set their own DTI limits and may count income and debts differently (for example, using a percentage of a student loan balance when the payment is deferred).
- The 36% and 43% thresholds are reference points, not approval guarantees.
- Use gross (pre-tax) income, not take-home pay.
Frequently asked questions
How do I calculate my debt-to-income ratio?
Add your monthly debt payments and divide by your gross monthly income. $2,000 ÷ $6,000 = 33%.
What is a good debt-to-income ratio?
Lower is better. Limits vary by lender and loan type, so check the specific lender’s requirements. The CFPB notes that different loan products have different limits.
Does rent count in DTI?
For a mortgage application your current rent is replaced by the proposed housing payment. For other loans lenders may count rent; ask the lender.
Are utilities included in DTI?
No. DTI counts debt payments such as loans and credit card minimums, not living expenses like utilities or groceries.
Is DTI based on gross or net income?
Gross (before-tax) monthly income is the standard basis lenders use.
Sources
- CFPB — What is a debt-to-income ratio? — definition and the $2,000 ÷ $6,000 = 33% example
- CFPB — What is a Loan Estimate? — proposed housing payment details
This calculator gives estimates for planning and education only. It is not financial, tax or investment advice. Your lender, card issuer, employer or tax authority uses its own terms, fees and rounding, so confirm figures with them before deciding. See our disclaimer and how we build and check calculators.