How to Calculate Your Debt-to-Income Ratio
Debt-to-income ratio (DTI) is the percentage of your monthly gross income that goes toward debt payments. Lenders use DTI to assess your ability to manage monthly payments and repay borrowed money. It is one of the key factors in mortgage and loan approval decisions. This calculator supports multiple currencies.
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Formula
Debt-to-Income Ratio Calculator
Calculate your debt-to-income ratio to assess financial health and loan eligibility.
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Worked Example
Given:
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FAQs
What DTI ratio do mortgage lenders require?
Most conventional mortgage lenders prefer a DTI below 36%, with no more than 28% going toward housing costs. FHA loans allow up to 43% DTI. Some lenders approve loans up to 50% DTI with strong compensating factors.
What is the difference between front-end and back-end DTI?
Front-end DTI includes only housing costs (mortgage/rent + taxes + insurance) as a percentage of income. Back-end DTI includes all debt payments. Mortgage lenders typically look at both, but the back-end DTI is the more commonly cited figure.
How do I improve my DTI ratio?
Increase income, pay down existing debts (starting with the highest payment-to-balance ratio), avoid taking on new debt before applying for a loan, and consider debt consolidation to reduce monthly payments.