What is a good debt-to-income ratio?

Most lenders consider a DTI below 36% healthy, 36–43% a caution zone, and above 43% high risk — the threshold used by many mortgage underwriting guidelines.

How is debt-to-income ratio calculated?

Add up your monthly debt payments (mortgage or rent, car loans, credit cards, and other debt), divide by your gross monthly income, and multiply by 100.

Does DTI include rent or only loan payments?

Housing costs count whether you rent or own. Mortgage, rent, HOA dues, and property taxes are typically included alongside other recurring debt.

How can I lower my debt-to-income ratio?

Pay down revolving balances like credit cards, avoid new debt before a big application, refinance to a lower payment, or increase your income.

Debt-to-Income Calculator — Free Online

About this calculator

A debt-to-income calculator divides monthly debt payments by gross monthly income to produce a DTI percentage.

Who should use it: Borrowers checking lending guideline ratios before applying.

When to use it: Use it when preparing a mortgage or loan application budget.

Debt-to-income ratio

DTI = (Total monthly debt payments ÷ Gross monthly income) × 100

DTI compares recurring monthly debt obligations to gross monthly income. Lenders use it, alongside credit score, to judge how much additional debt a borrower can safely take on.

Step-by-step

Enter gross monthly income
Use pre-tax income from all reliable sources.
Add mortgage or rent
Your primary housing payment drives the housing ratio.
Add other monthly debts
Car loans, credit cards, and other recurring debt payments.
Review your ratio and risk band
See DTI, housing ratio, and a safe, warning, or high risk read.

Worked example: $6,000 income with $2,700 in monthly debt

Mortgage $1,800, car loan $400, credit card $300, other debt $200.

Total monthly debt = $1,800 + $400 + $300 + $200 = $2,700
DTI = ($2,700 / $6,000) × 100 = 45%
45% is above the 43% threshold many lenders use, so this is flagged high risk.

45% DTI — high risk band.

How to interpret the result

Lower DTI generally means more room in underwriting guidelines — lenders still review credit and assets.

Key definitions

DTI: Debt-to-income ratio — total monthly debt payments divided by gross monthly income.
Housing ratio: The front-end DTI — just the mortgage or rent payment divided by gross monthly income.
Gross income: Income before taxes and other deductions, the figure lenders typically use for DTI.

Common use cases

Checking mortgage or auto loan readiness before applying
Deciding whether to pay down debt before a big purchase
Tracking DTI improvement over time as debts are paid off

Tips

Use gross (pre-tax) income, not take-home pay, to match how most lenders calculate DTI.
Include every recurring debt payment, not just loans you're actively trying to pay off.
A DTI under 36% gives the most room when applying for new credit.

Common mistakes

Using net income instead of gross

Fix: Switch to gross monthly income so the ratio matches lender calculations.

Leaving out small recurring debts

Fix: Include every monthly obligation — student loans, personal loans, and minimum card payments all count.

Limitations

Different lenders include different debts in DTI.
Not a credit decision.