How the Debt-to-Income Ratio Calculator works
Debt-to-income ratio compares required monthly debt payments with income before taxes and deductions. Lenders use it as one measure of repayment capacity, although limits vary by product and lender.
Method: DTI = total monthly debt payments ÷ gross monthly income × 100.
Inputs to review
- Gross monthly income: Use a realistic current value and test a conservative alternative.
- Monthly housing payment: Use a realistic current value and test a conservative alternative.
- Auto and student loan payments: Use a realistic current value and test a conservative alternative.
- Credit card minimum payments: Use a realistic current value and test a conservative alternative.
- Other recurring debt payments: Use a realistic current value and test a conservative alternative.
How to interpret the result
Review both housing-only and total DTI. A lower result generally leaves more room for taxes, utilities, food, saving, and irregular expenses that do not appear in the formula.
Assumptions and limitations
The result is not an approval decision. Definitions of debt and qualifying income differ, and the formula does not measure credit history, assets, down payment, or household expenses.
Recalculate when rates, balances, income, goals, or time horizons change. A useful estimate is a range built from several plausible scenarios, not a single precise-looking number.