Debt-to-Income Calculator

How it works

Your debt-to-income ratio is total monthly debt payments divided by gross monthly income, expressed as a percentage. Lenders use it to judge whether your budget can absorb another payment. The debt side includes housing (rent or mortgage, plus taxes and insurance if you own), car payments, student and personal loan payments, minimum credit card payments, and obligations such as child support. Everyday spending like groceries, utilities and subscriptions is not counted, because it is flexible. Lenders actually look at two ratios: the housing (front-end) ratio covering only housing costs, and the total (back-end) ratio calculated here. As a rough guide, below 20 percent is excellent, 20 to 36 percent is manageable for most lenders, 37 to 43 percent is the upper range many mortgage programs allow, and above 43 to 50 percent most lenders will hesitate or decline. The fastest way to improve DTI is to pay down revolving balances, because card minimum payments fall with balances, and earnings growth helps only if debts do not grow with it.