DTI Ratio Calculator

About the Debt-to-Income (DTI) Ratio Calculator

Your Debt-to-Income (DTI) ratio is a key financial metric that lenders use to assess your ability to manage monthly payments and repay debts. It's calculated by dividing your total monthly debt payments by your gross monthly income.

How it Works

• Total Monthly Debt Payments: This includes all of your recurring debt obligations, such as rent or mortgage payments, car loans, student loans, minimum credit card payments, and other personal loans.
• Gross Monthly Income: This is your total income before any taxes or deductions are taken out.

Why DTI Matters

A lower DTI ratio demonstrates a healthy balance between your debt and income. Lenders typically look for a DTI ratio of 43% or less when considering you for a new loan, such as a mortgage.

• 35% or less: You are likely in a good financial position and have a manageable amount of debt.
• 36% to 43%: You are still in a manageable range, but you may have less room in your budget for unexpected expenses.
• 44% or more: Lenders may see you as a higher risk, making it more difficult to qualify for new credit.

Use this calculator to understand your current financial standing and identify areas where you might need to reduce debt to achieve your financial goals.