DTI calculator (debt-to-income)
Measure what percentage of your income goes to paying debts. The #1 metric banks use to approve credit.
Your details
Monthly debt payments
Your DTI
42.5%
Verdict: Moderate risk
Total you pay on debts
USD 1 700
Sum of minimum monthly payments
Estimated free income
USD 2 300
For expenses, savings and investing
Recommendation
They approve your credit but at higher rates. Reduce debts before taking on new ones.
Frequently asked questions
What is DTI (Debt-to-Income ratio)?
It is the percentage of your gross monthly income that goes to paying debts (loans, cards, mortgage). It is the #1 metric banks use to decide whether to lend you money and at what rate. The lower, the better.
What is a good DTI?
≤20% = excellent. 21-35% = healthy. 36-43% = moderate risk, you get approved at higher rates. 44-50% = critical zone, many banks will deny you credit. >50% = severe over-indebtedness, restructuring is urgent.
What is the maximum DTI for a mortgage?
In the US, FHA accepts up to 43% (in some cases 50% with compensating factors). Conventional accepts up to 45-50%. In LATAM it varies: banks usually ask for a DTI of ≤35% including the new mortgage. Calculate with the new payment already included.
Does DTI include basic expenses (food, transportation)?
No. The traditional DTI only counts debt payments (minimum monthly payments). Banks assume your essential expenses are paid from the remaining income. That's why it's misleading: a 'healthy' DTI can coexist with a tight budget.
How do I lower my DTI quickly?
Options: 1) Increase income (second job, freelance), 2) Pay off small debts with the snowball method (frees up minimum payments), 3) Refinance to longer terms (lowers the monthly payment even though you pay more total interest), 4) Consolidate into a single low rate, 5) Don't take on new debt until you're back on track.
How to interpret your DTI?
The Debt-to-Income ratio (DTI) divides your monthly debt payments by your gross monthly income. It is the metric banks use to decide whether to lend to you and at what rate.
Standard ranges (CFPB / FHA):
- ≤20% — Excellent. Best rates and amounts.
- 21-35% — Healthy. You qualify for most credit.
- 36-43% — Moderate risk. Higher rates, limited amounts.
- 44-50% — Critical zone. Many banks will deny you credit.
- >50% — Over-indebtedness. Restructuring is urgent.
Important: we use gross income (before taxes) and minimum payments (not the total balance). For a mortgage, include the projected future payment.
Use this and much more in Wälo
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