Debt-to-Income Ratio Calculator
Enter your total monthly debt payments and gross monthly income to calculate your debt-to-income (DTI) ratio — a key number lenders use when evaluating mortgage and loan applications.
How the Debt-to-Income Ratio formula works
The DTI formula:
DTI% = (Total monthly debt payments / Gross monthly income) × 100
'Total monthly debt payments' typically includes rent or mortgage, car loans, student loans, minimum credit card payments, and other recurring debt — not everyday living expenses like groceries or utilities.
Step-by-step calculation
- Add up all recurring monthly debt payments (housing, loans, minimum card payments).
- Divide that total by gross (pre-tax) monthly income.
- Multiply by 100 to express the result as a percentage.
Worked example
Monthly debt payments totaling $1,800, with a gross monthly income of $5,500: DTI = (1,800 / 5,500) × 100 ≈ 32.7%.
Frequently asked questions
What DTI ratio do lenders consider good?
Many conventional mortgage lenders prefer a DTI under 36%, with some programs allowing up to 43–50% under certain conditions. Lower is generally viewed as lower risk, though exact thresholds vary by lender and loan type.
Should I use gross or net income?
DTI is conventionally calculated using gross (pre-tax) income, not take-home pay — this is the standard lenders use, even though it can make the ratio look more favorable than your actual after-tax cash flow.
Does DTI include expenses like groceries or utilities?
No — DTI is specifically about debt obligations (loans, credit cards, housing payments), not general living expenses, even though those also affect your real monthly budget.