What is debt-to-income ratio?
Your debt-to-income ratio (DTI) is the share of your gross monthly income that goes toward debt payments. Lenders rely on it heavily when deciding whether to approve a mortgage, car loan, or other credit — a lower DTI signals you have room in your budget to take on a new payment.
The formula
DTI = (Total monthly debt payments ÷ Gross monthly income) × 100
Add up every recurring debt payment — rent or mortgage, car, credit card minimums, student and other loans — and divide by your pre-tax monthly income.
Worked example
Gross monthly income $6,000, with monthly debts of $1,500 housing, $400 car, $200 card minimums, and $150 other loans ($2,250 total):
- DTI = $2,250 ÷ $6,000 × 100 = 37.5%
- That lands in the "manageable" 36–43% band — usually still acceptable for a mortgage, but lenders may want to see it lower.
What the bands mean
36% or below — strong; lenders view this favorably and you have budget room. 36–43% — manageable; often still approvable, especially for mortgages, but with less margin. Above 43% — high; approval gets harder and your options narrow. These are general guidelines — exact cut-offs vary by lender, country, and loan type.
Front-end vs back-end DTI
Lenders sometimes split DTI in two. Front-end counts only housing costs against income; back-end counts all monthly debt. This tool shows back-end DTI, the broader number lenders weigh most.
Common mistakes to avoid
Using net (take-home) pay instead of gross. Forgetting debts like student loans or co-signed payments. Including non-debt bills such as utilities, groceries, or subscriptions (they don't count). Opening a new loan or card right before applying for a mortgage, which pushes DTI up at the worst time.
Frequently asked questions
Should I use gross or net income?
Use gross (pre-tax) monthly income — that's what lenders use for DTI.
Which debts count?
Recurring debt payments like housing, car loans, credit card minimums, student loans, and other loans. Utilities and groceries are not included.
What is a good DTI?
36% or below is strong, 36–43% is usually still acceptable, and above 43% can make approval harder.
How can I lower my DTI?
Pay down debts, avoid new loans before applying, or raise your income. Clearing even one small loan can move the ratio.
Does DTI affect my credit score?
No — it isn't part of your score, but lenders check it separately alongside your score.
What's front-end vs back-end DTI?
Front-end counts only housing; back-end counts all debt. This calculator shows back-end DTI.
Is my data saved?
No. Everything runs in your browser; nothing is uploaded.