Debt-To-Income Ratio Calculator

The formula this calculator uses

DTI = Total Monthly Debt Payments / Gross Monthly Income

DTI

Debt-to-income ratio, usually expressed as a percentage

Gross income

Monthly income before taxes and deductions, not take-home pay

Debt payments

Contractual monthly obligations: housing, loans, support payments

Front-end

Housing expenses divided by income, often held to 28%

Back-end

All debts divided by income, often held to 36%

How to check the result by hand

1. 1

   Determine gross monthly income

   Before taxes. Salaried borrowers divide annual pay by 12. Hourly workers multiply the hourly rate by average weekly hours, then by 52, then divide by 12 — use averaged overtime only if the lender permits it. Self-employed borrowers generally average two years of net profit.

2. 2

   Add up contractual debt payments only

   Housing, auto loans, student loans, personal loans, credit card minimums, court-ordered support. Skip groceries, utilities, phone bills, fuel and insurance premiums — those are expenses you can cancel, not debts a lender counts.

3. 3

   Compute the front-end ratio

   Divide housing cost by gross income. With $1,850 housing on $7,200 gross, that is 1,850 / 7,200 = 0.25694, or 25.7%. Conventional guidance keeps this near 28%.

4. 4

   Compute the back-end ratio

   Divide total obligations by the same gross income. Here: $2,620 / $7,200 = 0.36389, or 36.4%. This is the number that usually decides the application.

5. 5

   Compare against headroom, not just the threshold

   At a 36% guideline, this income supports $2,592 of obligations; the borrower carries $2,620, so they are $28 per month over. That is a solvable gap — paying off one loan or trimming a balance changes the answer immediately.