What this calculator does
Your debt-to-income ratio, or DTI, compares what you owe each month with what you earn each month. The Consumer Financial Protection Bureau (CFPB) defines it as all your monthly debt payments divided by your gross monthly income. Lenders use it to judge whether you can take on another payment, such as a mortgage, an auto loan or a personal loan.
This calculator adds up the debt payments you enter, divides the total by your gross income and shows the result as a percent. It also shows your ratio without rent or mortgage, so you can see how much of the load comes from housing and how much comes from other debts. Finally, it compares your ratio with a target that you pick, and tells you how many dollars per month you have left under that target, or how far over it you are.
How to use it
- Gross monthly income. Use your pay before taxes and other deductions. If you are paid hourly or get irregular pay, a monthly average from the last year is a fair starting point.
- Housing payment. Enter your rent, or your monthly mortgage payment if you own.
- Other debts. Enter the monthly payment for each auto loan, student loan and credit card (use the minimum payment), plus any other loan payments such as a personal loan or child support.
- Your own target. Lenders set their own limits, so there is no single right number. Type the ratio you would like to stay under. The default of 36% is only a placeholder.
Do not include everyday bills such as groceries, utilities, phone service or insurance. Those are not debt payments, and they are not part of the DTI formula.
How DTI is calculated
The formula is simple:
DTI (%) = total monthly debt payments ÷ gross monthly income × 100
The calculator works in whole cents and rounds the final ratio to two decimal places. Because gross income is used, the ratio is lower than it would be if you divided by your take-home pay. That is how lenders measure it, so the number here is the one that matters for a loan application.
Worked examples
The first example follows the one the CFPB gives: a $1,500 mortgage, a $100 auto loan and $400 of other monthly debts, on $6,000 of gross monthly income. The other two rows were run through this calculator with a 36% target.
| Gross income | Monthly debts | DTI | Against a 36% target |
|---|---|---|---|
| $6,000 | $2,000 | 33.33% | $160 of room |
| $8,000 | $3,150 | 39.38% | $270 over |
| $5,000 | $2,570 | 51.40% | $770 over |
In the second row, the debts are $2,200 for housing, $450 for a car, $300 for student loans and $200 for credit cards. Without the housing payment, the ratio would be 11.88%, so most of the ratio comes from housing.
What counts as a good DTI?
A lower DTI means you keep more of each paycheck for other things, and it generally makes it easier to qualify for credit. The CFPB notes that different loan products and lenders have different DTI limits, so the cutoff depends on who you ask and what you apply for. If you plan to apply for a loan, ask the lender what limit it uses.
If your ratio is higher than you would like, there are two levers. You can lower the top of the fraction by paying off a balance or refinancing a loan to a lower payment. Or you can raise the bottom by increasing your income. Paying off a small loan completely removes its whole monthly payment from the formula, which is often the fastest change.
Frequently asked questions
- Is DTI based on gross or net income?
- Gross. The CFPB describes gross income as the amount you earned before taxes and other deductions are taken out.
- Do I count the full credit card balance?
- No. Count the monthly payment, usually the minimum payment shown on your statement, not the balance you owe.
- Does my credit score change my DTI?
- No. DTI uses only income and debt payments. Lenders look at both DTI and your credit history, but they are separate measures.
- Should rent be included?
- Yes, if you want to see your full ratio. When you apply for a mortgage, lenders usually replace your rent with the new mortgage payment, so you can enter the expected payment instead.
- Can DTI be over 100%?
- Yes. If your debt payments are bigger than your gross income, the ratio is above 100%. The calculator shows it as it is.
- What if my income changes from month to month?
- Use an average of recent months. Lenders often do the same when they review irregular income.
Important notes
This is an estimate for planning, not a loan approval, a credit decision or financial advice. Each lender decides which debts and which kinds of income count, and sets its own limit. For a real application, ask your lender how it calculates DTI. If you are struggling with debt, a nonprofit credit counselor can help you build a plan.