Credit & Debt
Back-end debt-to-income ratio
Add every contractual monthly obligation and divide by monthly income before tax. Multiply by 100 for the percentage lenders quote.
The Formula
DTI = Total monthly debt payments / Gross monthly income
Add every contractual monthly obligation and divide by monthly income before tax. Multiply by 100 for the percentage lenders quote.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| D | Total monthly debt payments | currency | Housing plus auto loans, student loans, credit card minimums and court-ordered support. Excludes utilities, food and insurance. |
| I(gross) | Gross monthly income | currency | Income before taxes, taken from pay stubs for hourly or salaried work, or averaged over 24 months for self-employment. |
What Each Symbol Means
Dcurrency
Total monthly debt payments
Housing plus auto loans, student loans, credit card minimums and court-ordered support. Excludes utilities, food and insurance.
I(gross)currency
Gross monthly income
Income before taxes, taken from pay stubs for hourly or salaried work, or averaged over 24 months for self-employment.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate debt-to-income ratio page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Debt-To-Income Ratio, filed under Finance. Every number the guide produces comes from substituting into this one line.