Debt-to-income ratio calculator
Lenders look at two ratios: housing cost over income, and all debt payments over income. The second is the one that decides most applications. Enter monthly figures, with income before tax, as lenders do.
- How lenders read it
- Comfortable
- Housing ratio
- 26.0 %
- Total monthly debt
- $1,720.00
- Income left after debts
- $3,280.00
- Room before 36%
- $80.00
- Room before 43%
- $430.00
The formula
Front-end ratio = housing ÷ gross income. Back-end ratio = (housing + all other debt payments) ÷ gross income. The usual thresholds are 36% for comfortable, 43% as a common ceiling, and 50% only with strong compensating factors.
Worked example
On a gross 5,000 a month, with 1,300 of housing, 300 of car finance and 120 of card minimums: a back-end ratio of 34.4% and a housing ratio of 26%. That is comfortable, with 80 a month of room before 36%.
How to use it
- 1Use gross income, before tax and contributions. A ratio worked out on take-home pay is not comparable with the thresholds.
- 2Count minimum payments, not what you choose to pay. That is what the lender counts.
- 3Leave out running costs such as utilities, food and insurance; they are not debts.
Questions people ask
Why gross income and not net?
It is the convention in most lending markets, including the United States where the 43% figure comes from. In France and Morocco banks quote a net figure of around 33% to 35% instead; the borrowing capacity calculator works that way.
How do I lower the ratio quickly?
Clearing a small balance with a high minimum payment moves it most. Paying off a card with a 120 minimum does more for the ratio than overpaying a mortgage by the same amount.
Last reviewed: 2026-10-20