Debt-to-Income Ratio Calculator
Calculate your debt-to-income ratio to assess your financial health.
Financial Information
Enter $0 if you have no debt — a debt-free state is valid and gives a 0% ratio.
Debt-to-Income Ratio
Your debt-to-income ratio is good. Most lenders prefer ratios below 36%.
About This Calculator
The Debt-to-Income Ratio Calculator helps you assess your financial health by comparing your monthly debt payments to your monthly income. This ratio is a key metric that lenders use to evaluate loan applications and determine your ability to manage additional debt.
A lower debt-to-income ratio indicates better financial health and greater ability to take on new debt. Most lenders prefer ratios below 36%, with 43% typically being the maximum for qualified mortgages.
Formula & Calculation Method
Debt-to-Income Ratio Calculation:
Debt-to-Income Ratio = Monthly Debt Payments ÷ Monthly Gross Income
Percentage = Ratio × 100
Monthly debt payments include mortgage/rent, credit cards, car loans, student loans, and other recurring debt obligations. Monthly income is your gross (before taxes) income from all sources.
How to Use This Calculator
- Enter Monthly Income: Input your total monthly gross income (before taxes) from all sources.
- Enter Monthly Debt: Input your total monthly debt payments including mortgage/rent, credit cards, loans, etc.
- View Results: See your debt-to-income ratio, percentage, status, and recommendations.
Frequently Asked Questions
What is a good debt-to-income ratio?
A ratio below 36% is considered good, with most lenders preferring ratios below 43% for qualified mortgages. Ratios below 20% are excellent and indicate strong financial health.
What debts should I include?
Include all recurring monthly debt payments: mortgage/rent, credit card minimum payments, car loans, student loans, personal loans, and any other monthly debt obligations. Don't include utilities, insurance, or other non-debt expenses. If you have no debt, enter $0 — a debt-free state is valid and produces a 0% ratio.
How do lenders use this ratio?
Lenders use your debt-to-income ratio to assess your ability to repay new loans. Lower ratios indicate less risk and may qualify you for better interest rates and loan terms.
How can I improve my debt-to-income ratio?
You can improve your ratio by increasing income, reducing debt payments, or both. Paying off credit cards, refinancing loans, or increasing your income through raises or side jobs can help lower your ratio.
Expert Reviewed
This calculator was reviewed by NumCalculators Editorial Team, Multi-disciplinary Expert Team