Debt-to-Income Ratio Calculator - Free DTI Calculator Online

Debt-to-Income (DTI) Ratio Calculator

Gross Income

*Employment Income($):

Pension & Social Benefits($):

Investment Portfolio Income:

Additional Revenue($):

Debt Payments

*Housing Expenses($):

Mortgage($):

Property Tax($):

HOA Fees($):

Homeowner Insurance($):

*Credit Cards($):

Student Loan($):

*Auto Loan($):

Other Loans and Liabilities($):

Debt-to-Income (DTI) Ratio Calculation Results:

Yealy Total Income:

Monthly Total Income:

Yealy Total Debt:

Monthly Total Debt:

Yealy Housing Costs:

Monthly Housing Costs:

Yealy Other Debts:

Monthly Other Debts:

Yealy Remainings:

Monthly Remainings:

Front-End DTI Ratio:

Back-End DTI Ratio:

How to Use This DTI Calculator - Step-by-Step Guide

Step 1: Gather Your Income Information

Before using the calculator, collect the following documents:

Recent pay stubs (2-3 months)
Tax returns (last 2 years for self-employed)
Bank statements showing investment income
Social Security award letters
Pension or retirement income statements

Important: Use gross income (before taxes and deductions), not net income.

Step 2: Input Your Income Data

Employment Income: Enter your regular salary or wages
Pension & Social Benefits: Include Social Security, pensions, disability payments
Investment Portfolio Income: Dividends, interest, capital gains
Additional Revenue: Rental income, side business income, alimony received

Tip: Select the appropriate time period (monthly or yearly) for each income source.

Step 3: Enter Your Debt Information

Housing Expenses:

Housing Expenses: Current rent or mortgage payment
Property Tax: Annual property taxes (if not included in mortgage)
HOA Fees: Homeowners association fees
Homeowner Insurance: Annual insurance premiums

Other Debts:

Credit Cards: Minimum monthly payments only
Auto Loans: Monthly car payment
Student Loans: Monthly student loan payments
Other Loans: Personal loans, lines of credit, etc.

Step 4: Review and Calculate

Click "Calculate DTI" to generate your results. The calculator will show:

Your front-end DTI ratio (housing costs only)
Your back-end DTI ratio (all debts)
Monthly and yearly income/debt breakdowns
Visual representation of your financial picture

Step 5: Interpret Your Results

DTI Ratio Interpretation:

DTI Range	Rating	Lending Impact
0% - 20%	Excellent	Easily qualify for most loans with best rates
21% - 28%	Very Good	Good qualification chances with competitive rates
29% - 36%	Good	Generally acceptable for most loan programs
37% - 43%	Fair	May qualify but with higher rates or stricter terms
44% - 50%	Poor	Difficult to qualify; limited loan options
Above 50%	Very Poor	Unlikely to qualify; debt reduction needed

DTI Calculation Formulas and Methodology

Basic DTI Formula

DTI Ratio = (Total Monthly Debt Payments ÷ Gross Monthly Income) × 100

Front-End DTI Ratio (Housing Ratio)

Front-End DTI = (Monthly Housing Expenses ÷ Gross Monthly Income) × 100

Where Monthly Housing Expenses include:

Principal and Interest (P&I)
Property Taxes
Homeowners Insurance
Private Mortgage Insurance (PMI)
HOA Fees
Rent (if applicable)

Back-End DTI Ratio (Total Debt Ratio)

Back-End DTI = (Total Monthly Debt Payments ÷ Gross Monthly Income) × 100

Where Total Monthly Debt Payments include:

All housing expenses (from front-end calculation)
Minimum credit card payments
Auto loan payments
Student loan payments
Personal loan payments
Child support/alimony payments
Other recurring debt obligations

Income Calculation Components

Gross Monthly Income includes:

Base salary or hourly wages (before taxes)
Overtime pay (if consistent for 2+ years)
Bonuses and commissions (averaged over 2 years)
Self-employment income (after business expenses)
Rental income (75% of gross rental income)
Investment income
Social Security benefits
Pension or retirement income
Alimony or child support (if continuing for 3+ years)

Understanding Debt-to-Income Ratios

What is Debt-to-Income Ratio?

The debt-to-income ratio (DTI) is a financial metric that compares your monthly debt payments to your gross monthly income. Lenders use this ratio to assess your ability to manage monthly payments and repay debts.

Types of DTI Ratios

Front-End DTI Ratio

Also called the housing ratio, this includes only housing-related expenses: mortgage payments, property taxes, homeowners insurance, and HOA fees. Most lenders prefer this ratio to be 28% or lower.

Back-End DTI Ratio

This includes all monthly debt obligations: housing expenses plus credit cards, auto loans, student loans, and other debt payments. Lenders typically prefer this ratio to be 36% or lower.

DTI Ratio Guidelines

Excellent (0-20%): You have minimal debt relative to income
Good (21-35%): You're managing debt well
Fair (36-49%): You may have difficulty obtaining new credit
Poor (50%+): You may need to reduce debt before applying for loans

How to Improve Your DTI Ratio

Pay down existing debt
Increase your income
Avoid taking on new debt
Consider debt consolidation
Make extra payments on high-interest debt

Why DTI Ratio Matters

Your DTI ratio affects:

Mortgage approval and interest rates
Credit card approvals
Auto loan terms
Personal loan eligibility
Overall financial health assessment

Frequently Asked Questions

What is a good debt-to-income ratio?

Generally, a DTI ratio of 36% or lower is considered good. For mortgages, lenders prefer front-end ratios of 28% or less and back-end ratios of 36% or less.

What income should I include in DTI calculations?

Include all gross monthly income before taxes: salary, wages, bonuses, commission, rental income, investment income, alimony, and other regular income sources.

What debts are included in DTI ratio?

Include minimum monthly payments on credit cards, loans (auto, student, personal), mortgage/rent, and other recurring debt obligations. Don't include utilities, groceries, or other living expenses.

How often should I calculate my DTI ratio?

Review your DTI ratio monthly or whenever your income or debt situation changes significantly. This helps you maintain good financial health and prepare for loan applications.

Take Control of Your Financial Future

Understanding your debt-to-income ratio is the first step toward better financial management. Use our calculator regularly to monitor your progress and make informed financial decisions.