Before applying for a mortgage, auto loan, or other significant credit, lenders will evaluate your ability to repay the debt. One of the primary metrics they use is the **Debt-to-Income (DTI) ratio**. This calculator helps you determine your current DTI, giving you insight into how lenders view your financial health.
Please enter a valid Gross Monthly Income greater than zero.
1. Monthly Income
2. Monthly Housing Expenses
Include your current rent or your projected future mortgage payment.
3. Other Recurring Monthly Debts
Enter the minimum monthly payments required. Do not include living expenses like groceries or utilities.
Your Results
Back-End Ratio (Total Debt): 0.0%
Front-End Ratio (Housing Only): 0.0%
Lender View:
Understanding Your DTI Ratio Results
Your Debt-to-Income ratio is a percentage that represents how much of your gross monthly income goes toward paying debts. Lenders look at two types of ratios:
Front-End Ratio (Housing Ratio): This calculates the percentage of your income that goes solely toward housing costs (rent/mortgage, taxes, insurance, HOA).
Back-End Ratio (Total Debt Ratio): This is the more critical number. It includes housing costs plus all other recurring monthly debts like car loans, student loans, and credit card minimums.
Why DTI Matters for Getting a Loan
A lower DTI shows lenders that you have a good balance between debt and income, suggesting you can afford to take on new loan payments. A high DTI indicates that you might struggle to make payments if your financial situation changes, making you a higher risk.
General DTI Thresholds
While requirements vary by lender and loan type (e.g., FHA vs. Conventional), here are general guidelines for the Back-End Ratio:
36% or Lower: Excellent. Most lenders view this as a healthy balance.
37% – 43%: Acceptable. This is often the sweet spot for obtaining a Qualified Mortgage. You may still need good credit scores.
44% – 50%: High Risk. Some lenders may still approve you, especially for FHA loans, but you might face higher interest rates or require compensating factors like significant cash reserves.
Over 50%: Very High Risk. Obtaining significant new credit, particularly a mortgage, is very difficult at this level.
How to Lower Your DTI
If your DTI is higher than you'd like, you can improve it by either increasing your gross monthly income or, more commonly, paying down existing debt to lower your monthly obligations. Focus on paying off high-interest credit cards or consolidating loans to reduce monthly minimums.
function calculateDTIRatio() {
var grossIncomeInput = document.getElementById('dtiGrossIncome').value;
var grossIncome = parseFloat(grossIncomeInput);
var errorBox = document.getElementById('dtiErrorBox');
var resultBox = document.getElementById('dtiResultBox');
// Validation: Ensure income is present and positive
if (isNaN(grossIncome) || grossIncome <= 0 || grossIncomeInput.trim() === "") {
errorBox.style.display = 'block';
resultBox.style.display = 'none';
return;
} else {
errorBox.style.display = 'none';
}
// Get Housing Costs
var housingPrincipal = parseFloat(document.getElementById('dtiHousingPrincipal').value) || 0;
var housingTaxes = parseFloat(document.getElementById('dtiHousingTaxes').value) || 0;
var totalHousing = housingPrincipal + housingTaxes;
// Get Other Debts
var carLoans = parseFloat(document.getElementById('dtiCarLoans').value) || 0;
var studentLoans = parseFloat(document.getElementById('dtiStudentLoans').value) || 0;
var creditCards = parseFloat(document.getElementById('dtiCreditCards').value) || 0;
var alimony = parseFloat(document.getElementById('dtiAlimony').value) || 0;
var otherDebt = parseFloat(document.getElementById('dtiOtherDebt').value) || 0;
var totalOtherDebt = carLoans + studentLoans + creditCards + alimony + otherDebt;
// Calculate Total Monthly Debt
var totalMonthlyDebt = totalHousing + totalOtherDebt;
// Calculate Ratios
var frontEndRatio = (totalHousing / grossIncome) * 100;
var backEndRatio = (totalMonthlyDebt / grossIncome) * 100;
// Determine Status
var statusText = '';
var statusColor = '';
if (backEndRatio 36 && backEndRatio 43 && backEndRatio <= 50) {
statusText = 'High. Qualifying may be difficult and depend on loan type.';
statusColor = '#fd7e14'; // Orange
} else {
statusText = 'Very High. Securing a mortgage will be challenging.';
statusColor = '#dc3545'; // Red
}
// Update Results in DOM
document.getElementById('dtiFrontEndResult').innerText = frontEndRatio.toFixed(1) + '%';
document.getElementById('dtiBackEndResult').innerText = backEndRatio.toFixed(1) + '%';
var statusElement = document.getElementById('dtiStatusText');
statusElement.innerText = statusText;
statusElement.style.color = statusColor;
// Show Result Box
resultBox.style.display = 'block';
}