Debt to Income Calculator

Debt-to-income ratio, or DTI, compares recurring monthly debt payments with gross monthly income. This calculator computes the simple back-end-style ratio as monthly debt ÷ gross monthly income × 100. If debt payments are $2,000 and gross monthly income is $6,250, the result is 32%. The result is a planning ratio, not a lender’s decision, because lenders define qualifying income and obligations differently. The two inputs must use the same time unit. Enter gross income before taxes, insurance, retirement deductions, and other payroll deductions. If income is annual, divide by twelve before entering it. Include the recurring monthly payments the relevant lender asks you to count: commonly housing, auto, student-loan, credit-card minimums, personal-loan, lease, alimony, or support obligations. Do not replace a required payment with the amount you hope to pay. The application instructions and underwriting guide control what belongs in the numerator. Lenders often discuss two related ratios. A front-end or housing ratio compares the proposed housing payment with gross income. A back-end ratio includes the housing payment plus other recurring debts. FHA underwriting materials commonly describe 31% housing and 43% total-debt benchmarks for manually underwritten cases, although automated underwriting, compensating factors, lender overlays, loan type, reserves, and documented income can change the result. The CFPB describes DTI as one factor used with credit history, income, and other information; it is not a universal approval cutoff. This calculator has only two fields, so it does not decide whether to include taxes, insurance, HOA dues, rent, or a proposed new mortgage. For a mortgage scenario, add the complete housing payment to monthly debt and compare it with the mortgage calculator or house affordability calculator. For a debt-reduction scenario, use the debt payoff calculator to test how a lower payment or paid-off account changes the numerator. Common mistakes include mixing annual debt with monthly income, using take-home pay instead of gross pay, omitting a required minimum payment, and assuming variable income qualifies dollar for dollar. A lender may average bonuses, require a history of self-employment, or exclude unstable income. A lower DTI can improve borrowing capacity, but it does not prove that a payment is affordable after taxes, insurance, maintenance, emergencies, or savings. Test the proposed payment, record the statements and pay information used, and recalculate when income or obligations change. For a formal application, use the lender’s requested definition rather than trying to reverse-engineer a universal threshold. Ask whether the proposed housing payment includes taxes, insurance, HOA dues, and mortgage insurance. A careful DTI review pairs the percentage with a cash-flow budget, reserves, and the full cost of the proposed loan. DTI is also sensitive to how income is documented. A lender may review pay history, tax returns, bank statements, or employment continuity before deciding which income is stable enough to qualify. Use the program's underwriting rules for the formal application. It is useful to keep a copy of the income and debt statements used in the estimate, especially when payments are changing. Recalculate after a raise, job change, debt payoff, new lease, or proposed housing payment so the ratio reflects the scenario being reviewed.