Debt payments as a share of gross income
DTI expresses debt payments as a percentage of gross income, before tax and other deductions. The remaining-income figure also uses gross income; it is not disposable income and does not account for food, utilities, tax, or other living costs. Monthly gross income used converts annual income to a monthly average. Other monthly debt payments used is the aggregate field or the sum of the active rows, never both. The breakdown shows each obligation and its share of monthly gross income.
If you have already chosen a manageable principal-and-interest payment, use the Loan Affordability Calculator to estimate the loan amount corresponding to that payment.
The formula
Annual gross income is divided by twelve; monthly gross income is used directly. Housing and all other obligations remain monthly. In Individual payments mode, sum the categorized rows instead of the single Other monthly debt payments field. Housing ratio uses housing only, while current DTI includes housing plus other debts. The proposed payment is added once; ratios above 100% are displayed without a cap.
Adding one new payment
Gross monthly income of 5,000 with housing of 1,000 and other debts of 500 produces a current DTI of 30%. Adding a 250 monthly payment raises total obligations to 1,750 and DTI to 35%.
How to use this calculator
- Select Monthly or Annual gross income, then enter income before taxes. Changing the period converts the entered amount.
- Enter housing separately. Choose One total or Individual payments for other monthly debts; add, remove or paste rows and include each payment once.
- Enter only the incremental loan payment you want to test. Review live current and projected DTI, the monthly income used and the obligation breakdown.
Use the obligation definition that fits the application
Lenders may include mortgage principal, interest, property taxes, insurance, association charges, and other obligations under their own rules. Treatment of rent, student loans, support payments, variable income, and jointly held debts can also differ. Confirm the requested definition with the lender rather than assuming this arithmetic replaces underwriting.
If a new loan will replace an existing payment, remove the replaced payment from the current-obligation fields before adding the new one for the proposed scenario. This calculator simply adds the additional payment; it cannot identify refinanced debts automatically.
Keep income periods and debt payments consistent
Changing the income period converts the current valid amount: 5,000 monthly becomes 60,000 annually. Debt payments do not change period. Annual income is a monthly average, which may differ from your actual cash receipts in a particular month.
The individual-payment editor covers other debts only. Enter housing in its own field and keep the proposed new payment separate. For example, monthly housing of 1,000 with a 200 car payment and 300 card payment totals 1,500 current obligations. At 5,000 monthly or 60,000 annual gross income, current DTI is 30%; an additional 250 payment raises it to 35%.
Assumptions & limitations
What this calculation assumes
- Gross income is monthly or annual; debt amounts are required monthly payments.
- The proposed amount is additional to the obligations already entered.
- Gross income is positive.
What to keep in mind
- No universal approval cutoff or credit assessment is applied.
- The remaining gross income omits taxes and non-debt living expenses.
- Individual-payment rows cover other debts only and cannot exceed the original aggregate bound of one billion per month.
Common questions
Should I use take-home pay?
The conventional debt-to-income ratio uses gross income. A separate household budget based on take-home pay helps assess actual cash available to spend.
Why is there no good or bad badge?
Lender requirements vary by product and circumstances. Reporting the ratio without a universal approval label avoids implying an eligibility decision.
Can I use my annual salary?
Select Annual and enter gross yearly income. It is divided by twelve for the ratio. All housing and debt amounts still represent monthly payments.
Should I enter both the total and individual debts?
No. The selected mode uses either the total or the individual rows. Housing and the additional payment are always separate, so keep them out of the other-debt rows.
Sources & further reading
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