Debt-to-income calculator: How do lenders see my budget?
Lenders compare your monthly debt payments with your income before tax. Enter yours to see your ratio and how much room you have.
How Penny does the math
Add up your monthly debt payments: housing, car, student loans, card minimums, and other loans.
Divide by your gross monthly income, before taxes. The housing ratio uses only rent or mortgage.
The 36% and 43% marks are common rules of thumb. Each lender sets its own limits.
Questions, answered
What is a debt-to-income ratio?
It is all your monthly debt payments divided by your gross monthly income. The CFPB's example: $2,000 in payments on $6,000 of income is a 33% DTI.
What counts as debt?
Lenders count different things. Most include housing payments, car and student loans, minimum card payments, and other loans. Bills such as utilities and groceries usually don't count.
What is a good DTI?
Lower is better. Many lenders like to see 36% or less. Above about 43%, approval gets harder for many loan types. Limits vary by lender and loan.
How can I lower my DTI?
Pay down a balance, especially one with a high monthly payment, or add income. Consolidating debt at a lower rate can also lower your monthly payments.
