What is Debt-to-Income (DTI) ratio?

DTI = Total Monthly Debt Payments / Gross Monthly Income × 100%. It's a key metric banks use when evaluating loan applications. Generally keep DTI below 36%, with housing costs under 28%. A DTI above 43% typically makes it difficult to qualify for conventional mortgages.

What's a healthy debt level?

DTI under 20%: Very healthy, plenty of disposable income. DTI 20-36%: Good, banks will likely approve loans. DTI 36-43%: Fair, may struggle to take on more debt. DTI 43-50%: High, loan approvals become difficult. DTI over 50%: Dangerous — half your income goes to debt payments. Take action to reduce debt.

How can I reduce my liabilities?

1. Avalanche method: pay off highest-interest debt first. 2. Snowball method: pay off smallest debts first for quick wins. 3. Debt consolidation: combine high-interest debts into one lower-rate loan. 4. Increase income: side hustles or part-time work. This tool gives you a clear picture of your debt to take that first step.

Liability Calculator - Debt Management & DTI

Debt List

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Total ($)

Monthly Payment ($)

Income

Gross Monthly Income ($)

Liability Analysis

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DTI Ratio

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Liability Analysis

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