Debt-to-Income (DTI) Ratio Calculator

How to use this DTI calculator

Your debt-to-income ratio compares what you owe each month with what you earn. Lenders use it to judge whether you can comfortably take on a new payment, so it is worth checking before you apply for a mortgage, car loan or personal loan.

1. Choose whether your income is monthly or annual with the "Income is" switch, then enter your gross income: your pay before tax. Add a partner's income if you are applying together.
2. Enter your rent or housing payment. Homeowners should use the full mortgage payment, including property tax, insurance and HOA fees. If you are about to buy, use the new payment you expect.
3. Add your other monthly debt payments: car loans, student loans, credit card minimums and anything else under "Other debts", such as personal loans or child support.
4. Read the result. You will see your back-end DTI, your front-end (housing only) DTI, a rating, and how far you are from the 36% and 43% marks in dollars.

The debt-to-income formula

Only required payments count, and they are measured as monthly amounts. For a credit card that is the minimum payment, not the balance. For a loan it is the scheduled repayment. The result is a percentage of your income before tax, which is why lenders can quote the same limits to everyone regardless of where they live or how they are taxed.

What lenders look for

There is no single cut-off. Each lender and loan program sets its own limits and weighs DTI alongside your credit score, savings and job history. These bands are a reasonable guide:

You may also hear about the 28/36 rule: keep housing at or below 28% of gross income and all debts at or below 36%. It is a guideline rather than a law, but it is a sensible personal target even when a lender would approve more.

How to lower your DTI

There are only two levers: smaller monthly payments or higher income. The quickest wins usually come from the payment side.

• Clear a small debt completely. Paying off a card or a nearly finished loan removes its whole payment from the calculation. The table under the results shows your DTI without each payment, so you can see which one moves the needle most.
• Target high payments, not just high balances. For DTI, a $425 car payment matters more than a $3,000 card with a $90 minimum. For saving interest, the reverse is often true. The debt payoff planner helps you balance both.
• Refinance or extend a loan. A longer term or lower rate reduces the monthly payment, although a longer term usually costs more interest overall.
• Avoid new credit before applying. A new car loan or store card in the months before a mortgage application can push you over a limit. Check the payment first with the car loan calculator.
• Document all your income. Regular overtime, bonuses or side income can count if you can show a steady history, which raises the bottom half of the ratio.

DTI is not the same as credit utilization

The two get mixed up because both are percentages lenders care about. DTI compares your monthly debt payments with your monthly income. Credit utilization compares your credit card balances with your credit limits, and it feeds into your credit score. You can have a low DTI with maxed-out cards, or a high DTI with cards you barely use. Paying down card balances helps both: it lowers the minimum payment that counts towards DTI and it lowers utilization. If cards are a big part of your payments, the credit card payoff calculator shows how quickly you could clear them.

DTI in different countries

The idea of comparing debt with income is universal, but the name and the maths change a little from place to place:

• United States: lenders use front-end and back-end DTI on monthly payments, exactly as this calculator does.
• Canada: lenders talk about GDS (gross debt service, housing costs including heating) and TDS (total debt service). For insured mortgages, the commonly cited limits are 39% GDS and 44% TDS.
• Australia and New Zealand: "DTI" often means total debt divided by gross annual income, so it is a multiple such as 5 or 6 rather than a percentage. Lenders also run a separate serviceability test on your monthly budget.
• United Kingdom: lenders focus on affordability checks and loan-to-income multiples, often around 4 to 4.5 times income, rather than a single DTI percentage.

Wherever you are, a lower ratio gives you more choice of lenders and more breathing room. When you are ready to see what that means for a home, the home affordability calculator turns your income and debts into a realistic price range.

This calculator gives estimates for education and planning. It is not financial advice, and your lender's figures may differ. See how we calculate.