What is a good debt-to-income ratio?

Generally, a DTI of 36% or lower is considered healthy. Many mortgage lenders cap acceptable DTI around 43%, though some loan programs allow higher with strong compensating factors.

Should I use gross or net income?

Lenders typically calculate DTI using your gross (pre-tax) monthly income, so enter your income before taxes and deductions for the most accurate comparison.

What counts as monthly debt?

Include recurring debt obligations such as rent or mortgage payments, car loans, student loans, minimum credit card payments, and other loan installments. Utilities and groceries are usually not included.

How can I lower my DTI ratio?

You can lower your DTI by paying down existing debt, avoiding new loans, or increasing your income. Even small reductions in monthly debt can meaningfully improve your ratio.

Debt-to-Income Ratio Calculator

What the Debt-to-Income Ratio Calculator Does

This calculator finds your debt-to-income ratio (DTI) — the share of your gross monthly income that goes toward debt payments. You enter your total recurring monthly debt and your gross (pre-tax) monthly income, and it returns a single percentage.

DTI is one of the main numbers lenders check when you apply for a mortgage, auto loan, or personal loan. It is useful for anyone planning to borrow, comparing payoff strategies, or simply checking whether their fixed obligations are at a comfortable level before taking on more.

How the DTI Formula Works

The formula is straightforward:

DTI = (Total Monthly Debt Payments / Gross Monthly Income) x 100

Gross income is your pay before taxes and deductions. "Monthly debt" means recurring required payments, not everyday spending. Include these:

Rent or mortgage payment (principal, interest, taxes, insurance)
Auto loan and lease payments
Minimum credit card payments
Student loans and personal loans
Child support or alimony

What Counts and What Doesn't

Leave out variable living costs that lenders do not treat as debt: groceries, utilities, phone bills, streaming subscriptions, gas, and health insurance premiums are normally excluded.

Two versions are often quoted. The front-end (housing) ratio uses only your housing payment. The back-end ratio uses all debts and is the figure most lenders mean by "DTI." This calculator computes the back-end ratio when you enter all of your monthly obligations.

Worked Example

Suppose your gross monthly income is $6,000 and your monthly debts are: mortgage $1,400, auto loan $400, student loan $250, and credit card minimums $150. Total debt = $2,200.

DTI = (2,200 / 6,000) x 100 = 36.7%.

At 36.7%, this borrower sits right at the edge of the conventional comfort zone. Paying off the $150 credit card minimum would drop total debt to $2,050 and lower DTI to about 34.2%, which gives more breathing room with lenders.

How Lenders Read Your Ratio

Lower is better. As a general guide:

36% or below: usually viewed favorably; room to take on a new payment
37%-43%: acceptable to many lenders, but you may face closer scrutiny
Above 43%: harder to qualify — 43% is a common maximum for qualified mortgages, though some loan programs allow higher with strong credit or reserves

Tips and Common Mistakes

Use gross, not net, income — using take-home pay inflates your ratio and gives a misleading result. Use the minimum required payment on credit cards, not the full balance or what you actually pay.

To improve your DTI you can either raise income or lower required payments: pay off a small loan entirely to remove its payment, avoid opening new credit before a loan application, or refinance to a lower monthly payment. Re-run the calculator after each change to see the effect before you apply.