Compare your recurring monthly debt payments with your gross monthly income to estimate your debt-to-income ratio, housing ratio and how changes in monthly debt could affect those numbers.
Use gross income before taxes and recurring monthly debt obligations.
Your DTI is based on recurring debt obligations compared with gross income.
These scenarios hold gross income constant and reduce the total monthly debt used in the calculation.
| Scenario | Monthly Debt | Monthly Debt Reduction | Estimated DTI | Gross Income Remaining |
|---|
Debt-to-income ratio, commonly called DTI, compares recurring monthly debt payments with gross monthly income.
It is expressed as a percentage. For example, if someone has $3,000 in monthly debt obligations and $8,000 in gross monthly income, the resulting DTI would be 37.5%.
DTI calculations generally use income before income taxes and other payroll deductions. The income a lender accepts can depend on the type, history and documentation of that income.
Depending on the purpose of the calculation, recurring obligations may include housing costs, auto loans, student loans, personal loans, minimum credit-card payments and other recurring debts.
A housing ratio compares the housing payment alone with gross income. The total or back-end DTI includes the housing payment plus other recurring monthly debts.
No. Lenders and loan programs can use different underwriting standards, documentation rules, qualifying payments and other criteria. DTI is one measure used to describe the relationship between income and debt.
This calculator does not determine loan eligibility or approval. Actual underwriting may use different income definitions, qualifying debt payments and program-specific rules.
Add the recurring monthly debt payments being included in the calculation, divide that amount by gross monthly income, and multiply by 100 to express the result as a percentage.
Debt-to-income ratios are generally expressed using gross income before income taxes and payroll deductions rather than take-home pay.
DTI commonly uses the required monthly payment rather than the entire outstanding credit-card balance. Enter the recurring minimum monthly payment you want included in the calculation.
Student-loan obligations may be included in a lender's DTI calculation. The payment used for underwriting can depend on the loan status and applicable lending rules.
A housing ratio compares the monthly housing payment with gross monthly income. It is sometimes called a front-end ratio.
A back-end DTI generally compares total recurring monthly debts, including the housing payment, with gross monthly income.
There is no single DTI percentage that applies to every borrower or loan. Lenders and loan programs use different underwriting standards, and they may consider additional factors alongside DTI.
If reducing or paying off a debt lowers the recurring monthly obligation included in the calculation while income remains unchanged, the resulting DTI will generally be lower.
No. It calculates ratios from the numbers entered. Actual loan eligibility depends on the lender, loan type, income documentation, credit profile, assets and other underwriting requirements.