Debt-to-Income Ratio Calculator
Use your own numbers after reviewing the formula and worked example.
Quick answer
Debt-to-income ratio compares required monthly debt payments with gross monthly income.
Formula or method
Keep units, percentages and time periods consistent. The formula is useful as a transparent check on the calculator result and helps explain why changing one input changes the answer.
Step-by-step
- Add required monthly debt payments.
- Use gross monthly income.
- Divide debt by income.
- Multiply by 100.
Worked example
If monthly debt payments are $1,800 and gross monthly income is $6,000, DTI is 30%.
How to interpret the result
DTI is a screening ratio, not a full budget. It does not include every living expense.
When the answer is used for a purchase, loan, payroll decision, construction order, school grade, health estimate or other real-world choice, verify the assumptions that matter in that context. Accurate arithmetic still depends on accurate inputs.
Common mistakes
- Using total outstanding balances instead of monthly payments.
- Using annual debt with monthly income.
- Treating a lending guideline as a personal budget.
Authoritative reference
Lenders and loan products may use different definitions or limits.
Frequently asked questions
Does DTI include all living expenses?
No; it focuses on required debt obligations.
Is lower DTI generally easier for borrowing?
All else equal, it means less income is committed to debt.
Should gross or net income be used?
Standard DTI commonly uses gross income.