What the DTI ratio measures
Your debt-to-income (DTI) ratio is the share of your gross (pre-tax) monthly income that goes to debt payments: DTI% = monthly debt payments ÷ gross monthly income × 100. Lenders use it to judge whether you can take on a new loan. Include recurring debts like mortgage or rent, car loans, student loans, and minimum credit card payments; leave out things like groceries, utilities, and taxes, which are living expenses rather than debt. The denominator is gross monthly pay, which the monthly income calculator works out from any pay period.
How to use this calculator
Add up all your monthly debt payments and enter the total, then enter your gross monthly income before taxes. The tool returns your DTI as a percentage with a quick health label. If you are preparing to buy a home, also run the down payment calculator to see how much loan you would need. The largest item for most people is the payment from the mortgage calculator.
Worked example and benchmarks
With $1,500 of monthly debt and $5,000 of gross monthly income, DTI = 1,500 ÷ 5,000 × 100 = 30%, which most lenders consider healthy. Common benchmarks:
| DTI | How lenders view it |
|---|---|
| 0–36% | Healthy — strong approval odds |
| 37–43% | Caution — many mortgage limits sit here |
| 44%+ | High — approval is harder, rates higher |
These figures are an estimate for general information only and are not financial advice; consult a qualified professional before making money decisions. Clearing card balances moves the ratio fastest — plan it with the credit card payoff calculator.
Frequently asked questions
- How do I calculate my DTI ratio?
- Divide your total monthly debt payments by your gross monthly income and multiply by 100. For example, $1,500 of debt on $5,000 income is a 30% DTI.
- What is a good debt-to-income ratio?
- Lenders generally favor a DTI of 36% or below. Many mortgage programs allow up to about 43%, but lower is better for approval and rates.
- What counts as debt in the DTI calculation?
- Include rent or mortgage, car loans, student loans, personal loans, and minimum credit card payments. Exclude utilities, groceries, insurance, and taxes.
- Should I use gross or net income?
- Use gross income, which is your pay before taxes and deductions. Lenders calculate DTI on gross income, so that is what the calculator expects.
- Do I include the full credit card balance?
- No, only the minimum monthly payment counts, not the balance itself. A $5,000 card balance with a $125 minimum adds $125 to your monthly debt total, not $5,000.