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Debt-to-income ratio (DTI) — your total monthly debt payments divided by your gross monthly income — is one of the first numbers lenders look at when evaluating a mortgage, auto loan, or other credit application. A lower DTI signals more room in your budget to take on new debt; a higher one signals the opposite, regardless of your credit score.
This calculator computes your DTI percentage from your income and total monthly debt payments, compares it against the standard 36% guideline lenders commonly use, and shows how much additional monthly debt you could take on (if any) while staying under that threshold.
How it works
Enter your gross monthly income (before taxes) and your total monthly debt payments — mortgage or rent, car loans, credit card minimums, student loans, and any other recurring debt obligations. The tool divides debt payments by income to get your DTI percentage, labels it against standard lending thresholds, and shows your remaining capacity before hitting the commonly used 36% guideline.
- Enter your gross monthly income.
- Enter your total monthly debt payments.
- Review your DTI percentage and rating.
Examples
A borrower within guidelines
$5,000 monthly income with $1,500 in monthly debt payments gives a 30% DTI — labeled "Good," with $300/month of additional debt capacity before hitting the 36% guideline.
A borrower over the guideline
$5,000 monthly income with $2,500 in monthly debt payments gives a 50% DTI — labeled "High Risk," well above the 36% guideline most lenders prefer.
Who should use it
- Checking your DTI before applying for a mortgage or auto loan.
- Deciding whether you have room to take on additional debt responsibly.
- Tracking DTI improvement over time while paying down debt.
Industry applications
- Personal finance and lending
- Mortgage and loan qualification
- Financial planning and advising
Advantages
- Calculates DTI percentage and a clear rating label in one step.
- Shows remaining debt capacity before hitting the standard 36% guideline.
- No signup required.
Limitations
- Uses a general 36% guideline — specific lenders and loan types may apply different thresholds.
- Doesn't factor in credit score, assets, or other qualification criteria beyond DTI.
- Requires manually totaling all monthly debt payments yourself.
Common mistakes to avoid
- Using net (take-home) income instead of gross income, which understates the true ratio lenders will calculate.
- Forgetting to include all recurring debt obligations, not just the largest one (like a mortgage).
- Confusing DTI with credit utilization — they're different metrics that lenders evaluate separately.
Best practices
- Use gross monthly income and include every recurring debt obligation for an accurate ratio.
- Pay down high-payment debts first if you need to lower DTI quickly before a loan application.
- Recalculate before any major loan application, since even a new car payment can shift your DTI significantly.
Tips
- If your DTI is above 36%, focus on paying down the smallest debts first to reduce your number of monthly obligations quickly.
- Recalculate after any income change, not just after debt changes — a raise improves DTI just as much as paying off a loan.