Debt-to-Income Ratio Calculator

Using the debt-to-income estimate

Debt-to-income ratio compares recurring monthly debt payments with monthly income before tax. It is a lending ratio, not the share of your take-home paycheck spent on all household bills. This planner combines the housing payment and other debt categories you enter. A lower ratio may leave more borrowing room under a lender's rules, but it does not guarantee approval or tell you whether your personal budget is comfortable.

Step-by-step inputs

1. Monthly gross income (before tax). Use monthly gross income. Divide an annual salary by 12 before entering it; do not use after-tax deposits for this particular ratio. Starting example: $6,000 .
2. Monthly rent or mortgage. Use the recurring housing payment for the scenario. For mortgage planning, check whether the relevant lender expects taxes, insurance and other housing charges included. Starting example: $1,500 .
3. Car loan payments. Add recurring monthly auto-loan payments, not the entire car-loan balance or fuel expenses. Starting example: $350 .
4. Credit card minimum payments. Use required monthly card payments for the borrowing-ratio scenario. The card balance itself belongs in a payoff calculation. Starting example: $100 .
5. Other monthly debt payments. Include other ongoing debt payments such as student or personal loans. Avoid repeating amounts already entered in the other categories. Starting example: $150 .

Worked example with the starting values

Using the starting inputs, the estimate is Debt-to-income ratio: 35% .

The categories are summed before being divided by gross income. The reference amounts for 36% and 43% multiply that same income by each percentage. They are illustrative ratio benchmarks, not universal maximum payments or a promise that a particular lender accepts them.

Good — most lenders are comfortable at this level

Total monthly debt

$2,100

Max debt for 36% DTI

$2,160

Max debt for 43% DTI

$2,580

Compare monthly rent or mortgage scenarios

All other inputs stay at their starting values. These are modeled comparisons, not quotes, predictions or individual recommendations.

Make a useful comparison

Compare your current obligations with the proposed post-purchase scenario. If a mortgage replaces rent, replace the housing input rather than adding both. If a car loan will remain, keep it in the post-purchase obligations even if you hope to repay it later.

Use the budget calculator alongside DTI. Groceries, childcare, utilities, healthcare and savings can use substantial cash without appearing as debt payments. Two households with the same DTI can have very different money left after essentials.

Use documented income and the lender's definition when preparing an application. Variable earnings, bonuses and self-employment income may not be accepted at a simple recent monthly average. Ask how the lender treats each source before assuming it supports more debt.

Common mistakes to avoid

• Annual income entered in a monthly field makes the ratio look artificially low. Whole debt balances entered as monthly payments make it artificially high.
• The displayed assessment uses broad reference bands. Different loans and borrowers can be evaluated under different limits and other underwriting criteria.
• A higher income input changes the arithmetic immediately, but the calculator does not verify earnings or predict a future raise. Keep hypothetical scenarios separate from an actual application.