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See how much of your monthly income goes toward debt repayments with our free debt-to-income ratio calculator. Enter your income and monthly debt payments to estimate your DTI percentage and better understand your current debt load.

Debt-to-Income Ratio Calculator

How to Use This Debt-to-Income Ratio Calculator

Calculating your debt-to-income ratio takes less than a minute. Enter the following:

Enter your gross monthly income — your income before tax from regular sources such as salary, wages or other recurring income.
Enter your monthly debt payments — include housing payments, car loans, personal loans, credit card minimum payments, student loans and other regular debt commitments.
Review your DTI result — the calculator will estimate the percentage of your monthly income currently going toward debt payments.

You can also adjust the numbers to see how reducing certain debts could change your estimated DTI.

Keep in mind: Lenders may calculate debt-to-income differently and consider other factors such as expenses, credit history, income stability and lending criteria.

What Is a Debt-to-Income Ratio?

Your debt-to-income ratio (DTI) compares your regular monthly debt payments with your gross monthly income and expresses the result as a percentage.

The formula is:

DTI = (Total Monthly Debt Payments ÷ Gross Monthly Income) × 100

For example, if your gross monthly income is $8,000 and your monthly debt payments total $2,400, your DTI is 30%.

A lower DTI generally means that a smaller portion of your income is committed to existing debt. A higher DTI means more of your income is already going toward repayments, which may affect your ability to take on additional borrowing.

Lenders may consider your DTI alongside your income, expenses, credit history, existing debts and other eligibility requirements when assessing a loan application.

Use our Borrowing Power Calculator to estimate how much you may be able to borrow based on your financial information.

What Is a Good Debt-to-Income Ratio?

A lower debt-to-income ratio generally means less of your monthly income is committed to debt repayments, leaving more room for other expenses, savings and potential new borrowing.

Here is a simple guide for understanding your DTI:

Under 30% — Lower debt load
A relatively small portion of your income is going toward debt payments, giving you more financial flexibility.

30% to 36% — Generally manageable
Your debt payments take up a moderate portion of your income. Keeping other expenses under control can help maintain a comfortable financial buffer.

36% to 43% — Higher debt load
More of your monthly income is committed to debt. Lenders may look more closely at your overall financial position when assessing new borrowing.

43% to 50% — High debt load
A significant portion of your income is going toward repayments. Taking on additional debt may put more pressure on your monthly budget.

Above 50% — Very high debt load
More than half of your gross monthly income is being used for debt payments. Reducing existing debt may help improve your DTI and increase your financial flexibility.

Keep in mind: There is no single DTI percentage that guarantees loan approval or rejection. Lenders use different calculations and may also consider your income, living expenses, credit history, loan type and other eligibility requirements.

What Counts as Debt in Your DTI Calculation?

When calculating your debt-to-income ratio, include your regular monthly debt payments. The exact debts counted can vary depending on the lender and loan type.

Common debts to include:

Mortgage or housing loan payments
Car loan payments
Personal loan payments
Credit card minimum payments
Student loan payments
Buy-now-pay-later or installment payments
Child support or maintenance obligations
Other regular debt repayments

What About Credit Cards?

For a simple DTI calculation, you can generally use your required monthly credit card payment. However, lenders may assess credit cards differently and could consider your balance, minimum payment, available credit or total credit limit.

Because lending methods vary, the DTI shown by this calculator should be treated as an estimate rather than an exact lender assessment.

What Usually Isn't Included?

Everyday expenses generally aren't treated as debt payments in a basic DTI calculation, including:

Groceries and household expenses
Utilities
Transportation costs
Insurance premiums
Savings contributions
Entertainment and discretionary spending

These expenses can still be important when determining how much you can comfortably afford to borrow, even if they are not included in the basic DTI formula.

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How to Improve Your Debt-to-Income Ratio

If your DTI is higher than you would like, there are several practical ways to improve it before applying for new credit.

Pay down or pay off existing debts
Reducing your monthly debt payments is one of the most direct ways to lower your DTI. Paying off a smaller loan or credit card balance can eliminate a monthly payment entirely.

Reduce credit card debt
Paying down credit card balances can reduce your required monthly payments and improve your overall financial position. How lenders assess credit cards varies, so check the requirements that apply to your loan.

Increase your income
Because DTI compares debt payments with gross income, increasing your regular income can lower your ratio even if your debts remain the same.

Avoid taking on unnecessary new debt
New loans, credit card balances and other financing can increase your monthly debt commitments and raise your DTI.

Consider making extra debt repayments
If your budget allows, additional repayments can help reduce balances faster. Prioritising high-interest debt may also reduce the total interest you pay.

Review your DTI regularly
Recalculate your DTI as your income or debts change. This can help you track your progress and understand how changes to your finances affect your ratio.

Keep in mind: A lower DTI can strengthen your overall financial position, but it does not guarantee loan approval. Lenders may consider many other factors when assessing an application.

Debt-to-Income Ratio vs Serviceability — What Is the Difference?

Debt-to-income ratio and serviceability are related measures, but they look at your ability to manage debt in different ways.

Debt-to-income ratio
Your DTI compares your regular monthly debt payments with your gross monthly income. It provides a simple percentage showing how much of your income is already committed to debt repayments.

Serviceability assessment
Serviceability looks more broadly at whether you can comfortably afford a loan. Depending on the lender, this may include your income, existing debts, living expenses, interest rates, loan repayments and other financial commitments.

Some lenders may also test whether you could continue making repayments if borrowing costs increased or your financial circumstances changed.

Why both matter
You could have a relatively low DTI but still have limited borrowing capacity because of high living expenses or other financial commitments. Likewise, your DTI is only one part of a lender's overall assessment.

Understanding both can give you a clearer picture of your finances before applying for a loan.

Frequently Asked Questions

1. What is a debt-to-income ratio?
Your debt-to-income ratio (DTI) compares your regular monthly debt payments with your gross monthly income. It is expressed as a percentage and can help show how much of your income is already committed to debt.

2. How do I calculate my debt-to-income ratio?
Add your regular monthly debt payments, divide that amount by your gross monthly income, then multiply by 100. For example, $2,000 in monthly debt payments divided by $6,000 in gross income gives a DTI of about 33.3%.

3. What is considered a good debt-to-income ratio?
Generally, a lower DTI indicates that less of your income is committed to debt. However, there is no single percentage that guarantees loan approval, and acceptable DTI levels vary between lenders and loan types.

4. What debts should I include in my DTI?
Common examples include mortgage payments, car loans, personal loans, credit card minimum payments, student loans and other regular debt repayments. Individual lenders may calculate DTI differently.

5. Are everyday living expenses included in DTI?
Everyday expenses such as groceries, utilities and entertainment generally aren't included in the basic DTI formula. However, lenders may consider these expenses separately when assessing how much you can afford to borrow.

6. Can a high DTI affect my loan application?
It can. A higher DTI means more of your income is already committed to debt repayments. Lenders may consider this alongside your income, expenses, credit history and other financial information.

7. How can I lower my debt-to-income ratio?
You may be able to lower your DTI by paying down existing debts, reducing monthly debt payments, avoiding unnecessary new borrowing or increasing your regular income.

8. Is DTI the same as loan serviceability?
No. DTI focuses on the relationship between your income and debt payments. Serviceability is a broader assessment that may consider income, living expenses, existing commitments, loan repayments and other factors to determine whether you can comfortably afford a loan.

Know Your DTI Before You Apply

Understanding your debt-to-income ratio before applying for a loan can give you a clearer picture of your current financial position. You can see how much of your income is already committed to debt and how changes to your repayments could affect your DTI.

Use the calculator to test different income and debt amounts and see how paying down debt or taking on additional borrowing could change your ratio.

Remember, DTI is only one factor lenders may consider when assessing a loan application.

Related Calculators

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Mortgage Calculator — estimate monthly mortgage repayments and total interest
Personal Loan Calculator — compare repayments, interest and borrowing costs