Debt-to-Income (DTI) Ratio Calculator

Knowing your debt-to-income (DTI) ratio helps you manage your finances better. This simple calculation shows how much of your income goes toward paying debts. Understanding your DTI can help you make smart choices about loans and budgeting, and it can affect your chances of getting a mortgage or other credit.

• Knowing your debt-to-income (DTI) ratio is important for managing your money and applying for loans.
• A healthy DTI ratio can make it easier to get approved for loans.
• A DTI calculator makes it easy to calculate your ratio and provides clear results.
• If your DTI is high, you may have fewer borrowing options, so it's important to try to lower your debts.
• Use Bheja.ai’s AI insights to help with home loans. You can compare over 100 brands, get helpful alerts, and make smarter financial choices with less effort.

The Debt-to-Income (DTI) ratio is an important number that shows how healthy your finances are. You find it by dividing your total monthly debt payments (like mortgages, credit cards, and auto loans) by your gross monthly income. Lenders review your DTI to determine whether you can repay your loans. A lower DTI means your finances are in better shape and you’re more likely to get approved for credit.

The DTI ratio acts as a financial barometer. Here are a few reasons why it matters:

• Loan Approval: Lenders use DTI to decide if you are a good candidate for a mortgage or any form of credit. A high DTI may lead to loan rejection or higher interest rates.
• Financial Assessment: Your DTI ratio helps you evaluate your spending habits. If your DTI is high, it may indicate that you have too much debt relative to your income.
• Financial Planning: Knowing your DTI helps you budget better and decide whether to take on more debt.

You can figure out your DTI by following these easy steps:

Gather all the financial details you’ll need:

• Total monthly debt payments (e.g., rent/mortgage, credit card payments, auto loans, student loans)
• Gross monthly income (before taxes and deductions)

We have the most used prompts listed. You need to click the prompt closest to your needs and adjust it accordingly. Our prompts are here :

I am thinking of borrowing 700K for 30 years at 5.54% and my annual income is 150K, calculate my DTI

I am thinking of borrowing 500K for 30 years at 5.54% and my annual income is 120K. I am also paying $670 monthly on existing debt. Calculate my DTI

Follow the conversation with Bheja.ai and provide information to personalise your result.

It’s important to know what your DTI means:

• Below 20%: Excellent. You're in good financial shape.
• 20% - 36%: Acceptable. Most lenders will consider this range okay.
• 36% - 43%: Caution. This ratio might restrict your borrowing options.
• Over 43%: High. You may face challenges in getting loans.

Having a high DTI can lead to a few problems:

• Loan Rejections: Applications may be denied if your DTI exceeds lender thresholds.
• Higher Interest Rates: If you are approved, you may have to pay higher rates and receive less favorable loan terms.
• Payment Strain: A high DTI means a lot of your income goes toward debt, making it tough to pay for everyday expenses.

• Increase Your Income: Try picking up a side job or asking for a raise to earn more.
• Reduce Existing Debt: Pay off debts with the highest interest rates first.
• Budget Wisely: Monitor your spending to identify savings opportunities.
• Refinance Loans: Consider refinancing high-interest loans to lower your monthly payments. For home loans, you can use Bheja.ai’s refinance calculator.

For more detailed tips, check out resources like Moneysmart.gov.au or the Australian Securities and Investments Commission (ASIC).

To sum up, knowing your debt-to-income (DTI) ratio is key to making good financial decisions. Now you know how to figure it out, what lenders want, and why managing your debts matters.

Keep in mind that a lower DTI can help you get approved for loans. Use tools like a DTI calculator to see where you stand and take steps to improve.

Bheja AI can help you with home loans by comparing over 100 brands and sending you helpful alerts, making it easier to make smart financial choices. Take charge of your finances today!

Written by

Pravin Mahajan

Founder @ Bheja.ai | Mortgage Broker | Ex-CTO RateCity & CIMET

Pravin Mahajan is the Founder of Bheja.ai and an accredited Mortgage Broker (Credit Rep. 570637). Based in Sydney, he sits at the unique intersection of financial regulation and enterprise technology.

With over 30 years of experience, Pravin has architected the consumer platforms that millions of Australians rely on for daily financial and purchasing decisions. His career is defined by building high-scale systems that simplify complex choices:

• RateCity (Acquired by Canstar): As Chief Product & Technology Officer, Pravin led the tech transformation that culminated in the company's acquisition. He orchestrated "Australia’s First Home Loan Sale," a digital initiative that reached over 12 million people.
• CIMET: As CPTO, he built enterprise-grade infrastructure for energy and broadband comparison, scaling operations to support major B2B partners.
• Salmat (Lasoo): He architected digital catalogue systems used by 5.7 million monthly users, digitising the retail experience for brands like Target and Myer.
• Woolworths: Designed the real-time, secure "Pay at Pump" transaction infrastructure deployed Australia-wide.

Today, at Bheja.ai, Pravin combines this deep technical background with his Certificate IV in Finance and Mortgage Broking to build AI agents that don't just compare loans, but help Australians actively secure their financial future.