Debt Repayment Capacity (DTI) Calculator

Understanding the debt-to-income (DTI) calculator — concept and principle

Debt-to-income ratio (DTI) is the share of your gross monthly income that goes to debt payments. Lenders use it to judge whether you can take on a new loan, and you can use it to check whether your current debts leave enough room for living costs and saving. This calculator gives the front-end and back-end ratios, the money left after debts and essentials, and the payment ceilings at two common limits.

How it is calculated

• Front-end DTI = housing payment ÷ gross monthly income × 100.
• Back-end DTI = (housing payment + other debt payments) ÷ gross monthly income × 100.
• Left over = income − housing − other debts − other essential costs.
• Ceilings: income × 36% and income × 43% are the total monthly debt payments those ratios allow.

The calculator labels a back-end DTI up to 36% as healthy, up to 43% as stretched and above that as high. Gross income means before tax and deductions.

The principle

A ratio makes debt comparable across incomes: $2,400 of payments is heavy on $5,000 a month but light on $15,000. The long-standing US "28/36" rule of thumb says housing should stay under about 28% of gross income and all debts under about 36%. For years 43% was the DTI cap for a General Qualified Mortgage under the US ability-to-repay rule; since a 2020 amendment that definition uses a price-based test instead, but 43% is still a common benchmark.

Worked example

1. Inputs: income $6,000, housing $1,800, other debts $600, essentials $1,500.
2. Front-end: 1,800 ÷ 6,000 = 30%.
3. Back-end: (1,800 + 600) ÷ 6,000 = 40%, between 36% and 43%, so "stretched".
4. Left over: 6,000 − 1,800 − 600 − 1,500 = $2,100.00 before taxes and saving.
5. Ceilings: 6,000 × 0.36 = $2,160.00 and 6,000 × 0.43 = $2,580.00.

How to read the result

Your payments of $2,400 are $240 above the 36% ceiling and $180 below the 43% one, so a new loan would likely face tighter terms. Under 36% is generally comfortable, 36–43% is workable but leaves little buffer, and above 43% many lenders decline or require compensating factors. The left-over amount matters too: taxes still come out of it, so a small or negative figure is a warning even with an acceptable ratio.

Common mistakes

• Using take-home pay. Lenders use gross income, so a ratio from net pay looks worse than theirs.
• Leaving out minimum card payments, car loans or student loans.
• Counting utilities and groceries as debt. They belong in essentials, not DTI.

Frequently asked questions

What is a good debt-to-income ratio?

Under 36% is widely seen as healthy, and under 20% gives plenty of room.

How can I lower my DTI quickly?

Pay off small balances with high payments first, avoid new credit, or add documented income.

Is DTI the same as Korea's DSR?

Similar but not the same. DSR counts principal and interest on all loans against annual income.

Sources: Consumer Financial Protection Bureau, "What is a debt-to-income ratio?" · 12 CFR 1026.43, ability-to-repay and qualified mortgage standards (Regulation Z) · Fannie Mae Selling Guide, B3-6-02 Debt-to-Income Ratios