Debt-to-Income Ratio Calculator

Your debt-to-income ratio — or DTI — is one of the most important numbers in your financial life, especially if you’re planning to buy a home or apply for a loan. It tells lenders (and you) how much of your monthly income goes toward paying debts. The lower your DTI, the more breathing room you have — and the more likely you are to get approved for credit at good rates.

This calculator makes it easy to find your number in under a minute.

How to Use This Calculator

Figuring out your DTI takes just two steps:

1. Enter your monthly debt payments — Include every recurring debt payment you make each month. This means minimum credit card payments, car loans, student loans, personal loans, your rent or mortgage payment, and any other debt obligations. Don’t include things like groceries, utilities, insurance, or subscriptions — lenders only count actual debt payments.
2. Enter your gross monthly income — This is your income before taxes and deductions. If you’re salaried, divide your annual salary by 12. If your income varies, use an average of the last three to six months. Include all sources: your job, side work, freelancing, rental income, alimony, or any other regular income.

The calculator will instantly show your DTI percentage and tell you where you fall on the scale.

A quick example: If your monthly debt payments add up to $1,400 and your gross monthly income is $5,000, your DTI is 28%. That puts you in solid shape for most loan applications.

How Debt-to-Income Ratio Works

The math behind DTI is refreshingly simple:

DTI = (Total Monthly Debt Payments / Gross Monthly Income) x 100

That’s it. No compounding, no amortization schedules — just division. But what that single number means is where things get interesting.

DTI Ranges and What They Mean

Here’s how lenders and financial advisors generally interpret your DTI:

• Excellent (20% or below) — You’re in great shape. Only a small portion of your income goes toward debt, which means you have plenty of flexibility. Lenders love to see this, and you’ll likely qualify for the best rates available.
• Good (20% to 35%) — You’re managing your debt well. Most lenders will be comfortable lending to you in this range. You have room for a new loan or mortgage without stretching too thin.
• Fair (35% to 43%) — You’re getting into territory where lenders start paying closer attention. You can still qualify for most loans, but you might not get the best rates. It’s a good idea to work on lowering this number before taking on new debt.
• High (43% to 50%) — This is where doors start closing. Most conventional mortgage lenders won’t approve you above 43% DTI. You may still find some loan options, but they’ll likely come with higher interest rates and less favorable terms.
• Very High (above 50%) — More than half your income is going to debt payments, and most lenders will see this as too risky. At this level, it’s important to focus on paying down existing debt before taking on anything new.

The 43% Mortgage Threshold

If you’re thinking about buying a home, the 43% number matters a lot. Under federal lending guidelines, 43% is generally the highest DTI that allows you to get a “qualified mortgage” — the standard type of home loan that most banks and credit unions offer. Some lenders have stricter requirements (many prefer 36% or lower), and some government-backed loans like FHA loans may allow slightly higher ratios with strong compensating factors. But 43% is the number most people need to know.

Here’s what that looks like in real life: if you earn $6,000 per month before taxes, a 43% DTI means your total debt payments — including your future mortgage payment — can’t exceed $2,580 per month. If you’re already paying $800 toward a car loan and student loans, that leaves $1,780 for a mortgage payment (including taxes and insurance). That’s the kind of math this calculator helps you run through quickly.

Two Types of DTI

Lenders sometimes look at two separate DTI numbers:

• Front-end DTI — Only counts your housing costs (mortgage or rent, property taxes, insurance). Most lenders want this below 28%.
• Back-end DTI — Counts all your debt payments, including housing. This is the more commonly referenced number and the one this calculator focuses on.

FAQ

What’s a good DTI to aim for?

If you’re not applying for a loan anytime soon, aim for 20% or below. That gives you a healthy financial cushion and plenty of flexibility if an emergency comes up. If you’re preparing for a mortgage, getting below 36% should be your minimum goal — and the lower you go, the better your rates and options will be.

How can I lower my DTI?

You have two levers: reduce your debt payments or increase your income. On the debt side, focus on paying off your smallest debts first to eliminate monthly payments entirely. A $200/month car payment that disappears drops your DTI immediately. On the income side, a raise, a side job, or freelance work all count. You can also lower your DTI by refinancing debts to get smaller monthly payments — but be careful, because extending a loan term can mean paying more interest over time.

Here’s a concrete example: say your DTI is 40% on a $5,000 monthly income (that’s $2,000 in debt payments). If you pay off a credit card with a $150 minimum payment, your DTI drops to 37%. Pick up a side gig earning $500 per month, and it drops further to about 34%. Two moves, and you’ve gone from “high” to “good.”

Does my DTI affect my credit score?

Not directly. Your credit score is calculated differently (it looks at things like payment history, credit utilization, and account age). But there’s an indirect connection: if your DTI is high, you’re more likely to miss payments or carry high credit card balances, both of which hurt your score. Improving your DTI usually improves your credit score too.

Should I include my partner’s income and debts?

If you’re applying for a loan together, yes — include both incomes and both sets of debts. Lenders will look at your combined financial picture. If you’re applying alone, only include your own income and the debts you’re personally responsible for. This calculator works either way — just be consistent about whose finances you’re entering.

My DTI is above 50%. What should I do first?

Don’t panic. Start by listing all your debt payments and see if any can be eliminated quickly. Even paying off one small debt can make a meaningful difference. Then look at your budget for expenses you can cut temporarily to free up more money for debt payments. If you’re feeling overwhelmed, consider talking to a nonprofit credit counselor — they offer free advice and can help you build a plan. The most important thing is to start. Every payment you make brings that number down.