Debt-to-Income Ratio Calculator (DTI)

Use this calculator to determine your DTI ratio

Gross Monthly Incomes

(Including non-taxable)

   
Total Monthly Income  
   

Monthly Debt Payments

(Use only the minimum amount due every month)

  
  
   
Total Monthly Debt

 


Your Debt to Income Ratio (DTI) is

What is the Debt-to-Income (DTI) Ratio?

When you apply for a mortgage, lenders evaluate your debt-to-income (DTI) to determine your ability to manage monthly payments and repay your debts.

Your DTI compares your total monthly debt payments to your monthly gross income. Your gross income is your pay before taxes and other deductions are taken out. The debt-to-income ratio is the percentage of your gross monthly income that goes to paying your monthly debt payments. The lower your debt-to-income ratio, the better.

Your DTI ratio is one of the most important financial factors all lenders consider when determining if you can repay your financial obligations.

Maximum Debt-to-Income Ratios

Generally, 43% is the maximum DTI ratio allowed by lenders for an individual to qualify for a mortgage. The maximum DTI ratio can vary from lender to lender, however, as stated earlier, the lower the debt-to-income ratio, the better the chances that an individual will be approved for a mortgage.

Compensating Factors

Compensating factors can be considered by lenders in order to reduce the overall risk of a higher DTI ratio.

Some factors include:

  • Large down payment (low loan-to-value ratio)
  • Large amount of cash reserves (savings)
  • High credit scores and excellent credit history
  • Long length of employment with current employer
  • 12-24 months of rental or mortgage payments with no late payments
  • Conservative use of credit (low credit utilization)
  • Potential for increased future earnings - from job training, education in the borrower's profession or college degree.

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