Debt-to-Income Ratio Calculator

Your debt-to-income ratio (DTI) measures the proportion of your gross monthly income that goes toward debt repayments. Lenders use it as a key affordability indicator when you apply for a mortgage, loan or credit card. A lower ratio signals that you have sufficient income headroom to take on new credit.

To calculate DTI, divide your total monthly debt payments — including mortgage or rent, loan repayments, credit card minimums and any other obligations — by your gross monthly income, then multiply by 100 to get a percentage.

Most UK lenders prefer a DTI below 35–40%. Above 50% is considered high risk and significantly reduces your chances of approval. Reducing your DTI before applying for credit can improve both your approval odds and the interest rate you are offered.

What is debt-to-income ratio (DTI)? Monthly debt payments ÷ monthly gross income × 100. Includes: mortgage, credit cards minimum payments, personal loans, car finance, student loan, child maintenance. Does NOT include: utilities, council tax, groceries, transport. Sample: £4,000 gross monthly income; £1,500 mortgage + £200 credit card + £300 car finance = £2,000 debt. DTI = 50%. UK mortgage lenders typically max DTI 35-45% (varies by lender, with mortgage included).

UK mortgage affordability — DTI limits. Most lenders cap total housing costs at 35-40% of gross income (stress-tested at 7-8% notional rate). Total debt 40-45% gross income usually maximum. Some specialist lenders: higher DTI for proven income/credit. Sample first-time buyer: £40,000 salary = £3,333/month gross. Max housing cost ~£1,200/month = mortgage £200,000 at 4.5% over 25 years. Other debts (car, credit card £400/month) reduce mortgage borrowing capacity by £400 × 12 ÷ 0.045 = £80k.

Healthy vs unhealthy DTI levels. 0-15%: excellent — comfortable buffer, easy mortgage qualification, room to save and invest. 15-30%: healthy for most households — typical UK average. 30-40%: high but manageable — limited mortgage capacity for first-time buyers. 40-50%: stretched — vulnerable to interest rate rises, job loss. 50%+: stress — debt consolidation, budgeting review urgent. UK average household DTI 2025: ~33% (mortgage-heavy 40%+; non-mortgage households ~10%).

How to improve your DTI ratio. Pay off smallest debts first (snowball) OR highest-interest (avalanche). Avalanche optimal mathematically — saves £100s-£1,000s interest. 0% balance transfer cards: move £3,000-£5,000 credit card debt to 0% for 24-32 months (3% fee typical). Debt consolidation loan: replaces multiple debts with one (often lower combined APR). Income side: pay rise, second job, switching to higher-paid role — each £100 extra monthly income improves DTI noticeably.

DTI for mortgage applications. Mortgage lender 2026 criteria: total housing costs (PITI: Principal, Interest, Taxes, Insurance) divided by gross income — max 35% typical. Plus all other debts: total max 40-45% gross income. Stress test: lenders calculate at 7-8% rate even if current offer is 4.5% — affordability checked against rate rises. Self-employed: 2-3 years accounts averaged. Contractors: day rate × 5 × 46 weeks. Bonus income: 50% included usually. Tax credits/Child Benefit: usually included; benefits-only borrowers face strict assessment.