Debt-to-income ratio calculator
How to calculate my DTI ratio
Use this calculator to determine the percentage of your monthly gross income allocated to debt payments.
Debt to Income FAQ
You can find debt-to-income ratios by dividing your monthly income before taxes by your monthly debts. This does not include expenses like utilities and groceries.
Monthly income
Gross monthly income before taxes can include salaries from full-time and part-time jobs. It can also include freelance income, bonuses, rental property income and Social Security benefits.
Monthly Debts
Monthly debts can include home loans, auto loans, student loans, credit card debt and other payments such as child support or alimony.
- Lenders generally view 36% is the ideal DTI ratio for mortgage.
- A DTI range from 36%-41% shows that you have a manageable level of debt. You could still qualify for a mortgage, but lenders will scrutinize your financials more closely.
- DTI ratios over 50% indicates a high level of debt, suggesting you might struggle to repay a mortgage. Lenders like Rate can work with borrowers to help lower their DTI ratios.
You can improve your DTI ratio in two ways: increase your income and reduce your debts.
Increase your income
- Consider freelance work, part-time jobs or gigs like babysitting or dog-walking.
- If available, request additional hours at work or negotiate a higher salary.
- Sell items online, offer tutoring services or rent out a spare room.
Reduce your debts
- Pay off small debts to reduce the number of outstanding balances.
- Pay down high-interest debts, saving money on interest* and reducing your DTI more effectively.
- Pay more than the minimum required amount each month to reduce your debt faster.
- Refinance loans to a lower interest rate or extend the repayment term on existing loans to reduce monthly payments.
- Combine several debts into one loan. This may give you a lower interest rate. It can make managing your payments easier and may lower your monthly costs.
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*Savings, if any, vary based on consumer’s credit profile, interest rate availability, and other factors. Restrictions apply.
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply, contact Rate for current rates and for more information. All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Rate, Inc. does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Rate, Inc. Rate, Inc. its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action. Rate does not provide tax advice. Please contact your tax adviser for any tax related questions.