Formula
Gross means before tax:
Debt-to-income = debt payments / gross income
Lenders often look at this ratio. This page does not say whether you will be approved.
Assumptions
- The debt figure is the total of the monthly payments you include.
- Income is monthly and before tax.
Worked example
$1,500 of debt payments on $6,000 of gross income is a debt-to-income ratio of 25.00%.
Input definitions
- Gross monthly income
- Pay before tax and other deductions.
Limitations
This is an estimate, not a loan offer, tax filing, or investment advice. The currency control changes the symbol only.
Questions
Should rent be included?
Include it if you want a housing-plus-debt ratio. Leave it out if you are measuring only loans and cards.
Is 25% a decision?
It is only the ratio. A lender sets its own limit.