How this is calculated

Debt-to-income ratio = (monthly debt payments + housing payment) ÷ gross monthly income. Enter the full amount you would pay each month toward the debts a lender would count, plus the proposed housing payment, and divide by your gross income before tax. A result of 0.36 means 36 cents of every gross dollar goes to those obligations.

Worked example

Gross monthly income of $5,000, debt payments of $900, and a proposed housing payment of $1,500 gives (900 + 1500) ÷ 5000 = 0.48, or 48%. Many lenders prefer a ratio at or below 36% for the housing portion and around 43% in total, though limits vary by programme and country.

Why lenders use the ratio

Debt-to-income ratio compares required monthly debt payments with gross monthly income. Lenders may use different definitions and thresholds, and they verify income, credit, assets, and expenses separately.

FAQ

Should rent be included?

For a future mortgage estimate, include the proposed housing payment. For an existing personal budget, use the obligations that match the question you are asking.

Is this a lending decision?

No. It is an educational estimate and cannot predict approval, pricing, or affordability.