Debt-to-Income Ratio Calculator: Calculation and Examples
Calculate monthly debt payments as a percentage of gross monthly income.
Understanding the calculation
Use income before taxes and required monthly debt payments, including housing debt, loan installments, and card minimums. Ordinary groceries, utilities, and other living expenses are not debt payments in this ratio. Qualification standards differ between lenders and loan programs.
Debt-to-Income Ratio formula
Debt-to-income ratio = total monthly debt payments ÷ gross monthly income × 100.
Worked example
Monthly debt payments of $2,100 divided by $6,000 gross income give a 35% debt-to-income ratio. The housing-only ratio for a $1,500 payment is 25%.
Assumptions and interpretation
A debt-to-income ratio compares recurring debt obligations with gross income. It does not measure all living expenses, take-home income, or available savings. No approval cutoff is assumed.
Displayed amounts are rounded; intermediate calculations use unrounded values. Compare the result with the terms and payment schedule in your agreement. For background on the calculation, read the CFPB explanation of debt-to-income ratio.
Frequently asked questions
What happens when the interest rate is zero?
This ratio does not use an interest rate. Enter each required monthly debt payment directly.
What if debt payments exceed income?
The ratio can exceed 100%. Income after debt payments becomes negative. This is an arithmetic result, not a judgment about lender eligibility.
Should I use take-home income?
Use gross monthly income before taxes for this ratio. A take-home-income calculation measures a different share.