Debt-to-Income Calculator
Calculate your debt-to-income (DTI) ratio to assess your financial health and loan eligibility.
What is a good debt-to-income ratio?
DTI under 20% is excellent. 20-36% is good and manageable. 36-43% is fair but may limit loan options. Above 43% is concerning and most lenders won't approve conventional mortgages. FHA loans may allow up to 50% with strong credit. Lower is always better for financial health and borrowing power.
What debts are included in DTI calculation?
Include: Mortgage/rent, car loans, student loans, credit card minimum payments, personal loans, child support/alimony. DON'T include: Utilities, groceries, insurance (except mortgage insurance in housing payment), cable/internet, phone bills. Use gross income (before taxes), not net.
How can I improve my debt-to-income ratio?
Two ways: Reduce debt or increase income. Pay off small debts first (frees up monthly payments quickly), avoid new debt, consolidate high-interest debt to lower payments, or increase income through raises, side hustles, or spousal income. Even small improvements help with loan approvals.
Why do lenders care about DTI?
DTI shows your ability to manage monthly payments. High DTI means you're stretched thin financially and more likely to default. Lenders use it alongside credit score for approval. Even with excellent credit, high DTI (over 43%) can result in loan denial or higher interest rates as you're deemed higher risk.