This ratio compares monthly debt payments to monthly gross income and provides the percentage of your gross monthly income that goes towards paying your monthly debt payments.
How to Calculate
Add up your monthly debt payments, including credit cards, loans and mortgages.
Divide your total monthly debt payment amount by your monthly gross income.
The result will yield a decimal, so multiply the result by 100 to achieve your DTI percentage.
DID YOU KNOW? Generally, 43% is the highest DTI ratio a borrower can have to qualify for a mortgage, but lenders prefer a ratio lower than 36%, with no more than 28% of that debt going towards servicing a mortgage or rent payment. You can lower your DTI ratio by reducing your monthly recurring debt or increasing your gross monthly income.
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