Debt-to-Income Ratio Calculator

The debt-to-income ratio, usually shortened to DTI, is one division: the monthly payments you owe on debts, divided by your gross monthly income — income before taxes. It asks a lender's question, not a budgeting one: how much of this person's paycheck is already spoken for before we add our loan to it? That is why it counts payments rather than balances. A $20,000 car loan and a $2,000 one at the same $300 a month are identical to the ratio, and paying a loan off entirely moves it far more than paying the same money down across several.

What counts is narrow and specific: rent or the full mortgage payment (with taxes, insurance and HOA dues), car payments, student loan payments, the minimum payments on your credit cards even if you pay more, personal loans, and court-ordered obligations such as child support. What doesn't count is everything else you pay: utilities, groceries, gas, phone plans, insurance premiums, subscriptions, childcare. Lenders treat those as living expenses rather than debt — which is also the ratio's honest limit, because a $400 daycare bill and a $400 car payment feel the same on the first of the month and only one of them is in the number.

Lenders quote it two ways. The front-end ratio is housing alone over income, and the common guideline for it is 28%. The back-end ratio is every debt payment over income; 36% is the line most lenders call comfortable, and 43% is the ceiling many mortgage lenders hold to. Those three numbers are the 28/36 rule and its usual extension — guidelines lenders start from, with different programs and lenders setting their own limits on either side. This page reports the arithmetic and names the band; it doesn't decide anything, and neither does the ratio.

A worked example

Take the defaults: $6,000 of gross monthly income, $1,500 of rent, a $300 car payment, $200 in student loans and $100 in card minimums. The payments come to $2,100 a month. Housing alone is $1,500 ÷ $6,000 = 25.0%, under the 28% housing guideline. Everything together is $2,100 ÷ $6,000 = 35.0% — under the 36% line, with $60 a month of room: payments could rise by that much and the ratio would still be at 36%.

Now add a second car at $300 a month. Payments are $2,400 and the back-end ratio is 40.0% — above 36%, under the 43% ceiling many mortgage lenders use. The ratio has exactly two levers, and the receipt shows both: cutting payments by $240 a month brings it back to 36% with income unchanged, or income would need to rise by about $667 a month with payments unchanged. Notice what the first lever rewards — a payment that disappears, not a balance that shrinks. Paying $3,000 spread across the cards barely moves their minimums; clearing the $300 car loan outright removes the whole $300 from the ratio.

Common questions

Does rent count in my debt-to-income ratio? Yes. Rent isn't a debt — there's no balance behind it — but it is a fixed monthly obligation, and lenders count it the same way they count a mortgage payment. On a mortgage application your current rent drops out and the proposed housing payment takes its place, which is why this page asks for one housing figure: whichever one you want to test. What is DTI? walks the definition in full.

Should I use gross or take-home income? Gross — before taxes and deductions — because that's how lenders compute it. It also means the ratio flatters you a little: the payments are real dollars, and the income under them is money you never fully see. When you plan your own month, the budget planner works from take-home pay instead; that's not a contradiction, it's the difference between what a bank will lend and what a paycheck has to cover. If two of you are applying together, both incomes count — and so do both sets of payments.

Does my debt-to-income ratio affect my credit score? No. Income isn't on your credit report, so no scoring model can see the ratio at all. The number that overlaps is credit utilization — card balances against card limits — which is very much in the score. A lender looks at both, but they're separate gates: one is whether you can afford the payment, the other is how you've handled credit so far.

This is the arithmetic, not a decision. Lenders differ on which payments they count, how they verify income, and where their own limits sit — the 28%, 36% and 43% lines are common guidelines, not rules, and a ratio that clears them is a statement about a lender's risk rather than your comfort.