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Debt to Income Ratio Calculator
Calculate your debt-to-income ratio to understand your financial health
Monthly Debt Payments
Tip: A debt-to-income ratio of 36% or less is considered good. 43% is typically the highest ratio that still allows for a qualified mortgage. Lenders generally prefer to see DTI ratios below 36%.
What is Debt-to-Income Ratio Calculator?
The Debt-to-Income (DTI) Ratio Calculator evaluates your financial health by comparing monthly debt obligations to gross income. It helps determine creditworthiness and borrowing capacity, with most lenders preferring a DTI ratio of 36% or lower.
How This DTI Calculator Functions
- Income Assessment: Uses monthly gross income (before taxes) as the baseline for ratio calculation.
- Debt Compilation: Totals monthly obligations including housing, auto loans, credit cards, student loans, and other debts.
- Ratio Calculation: Divides total monthly debt payments by gross monthly income to determine DTI percentage.
- Mortgage Qualification: Evaluates DTI against the 43% threshold typically required for qualified mortgages.
The calculator analyzes your complete debt profile against income to provide insights into financial health and borrowing capacity, highlighting areas where debt reduction might be beneficial.
Improving Your DTI Ratio
- Pay down high-interest debt first
- Avoid taking on new debt obligations
- Consider debt consolidation options
- Explore ways to increase income
- Maintain DTI below 36% for optimal financial health
A DTI ratio above 43% may limit borrowing options and signal potential financial stress. Consider consulting financial advisors for personalized debt management strategies if your ratio exceeds recommended thresholds.