Debt Ratio Calculator

# Debt Ratio Calculator

Last updated 25th Apr 2022
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Last Updated: Sunday, 18 November 2018
You can use this debt ratio calculator to figure out if you might be at risk of being denied a loan. In general, lenders apply certain rules when evaluating someone that has applied for credit. In the mortgage industry, they use a rule of 32, which states that the total of all your monthly debt payments cannot exceed 32% of your monthly income. When debt ratios approach 40%, the chances of being denied credit or a loan are high.

## Calculator Definitions

The variables used in our online calculator are defined in detail below, including how to interpret the results.

### Sources of Income:

In this section of the calculator, you are going to list your monthly sources of after tax income.

### Monthly Income After Taxes (\$ / Month)

This is your monthly household income after taxes. This monthly figure would include income from all sources, including the income from a spouse or partner.

### Other Monthly Income (\$ / Month)

If you have any other reliable source of monthly income, then list it here. Keep in mind this value needs to be stated on an after-tax basis.

### Monthly Debt Payments:

In this next section of the calculator, you are going to enter all of your monthly debt payments, including installment loans and personal loans.

### Mortgage Payment (\$ / Month)

This is the monthly mortgage payment you make each month, including the payment of any property taxes.

### Monthly Rent (\$ / Month)

If you don't own a home and you are paying rent each month, then enter that amount here.

### Car Loans / Lease Payments (\$ / Month)

This is the total of all the car loans or car lease payments you make each month.

### Personal Loans (\$ / Month)

If you have any personal loans, then enter your monthly payment on those loans here.

### Credit Cards Minimums (\$ / Month)

If you are making minimum payments on a credit card, then enter that amount here because this type of arrangement is similar to a loan. If you're paying off the balance on your credit card each month, then you would not enter that amount here.

### Student Loans (\$ / Month)

Enter your monthly student loan payments, if any, in this section of the calculator.

### Other Debt (\$ / Month)

If you're making any other payment on debt that has not been previously discussed, then enter that amount here.

### Total Monthly Income (\$ / Month)

This is the total of all your existing sources of monthly income. This is the money you earn each month that can be used to pay off your debt.

### Total Monthly Debt Payments (\$ / Month)

This value is the total of all the monthly payments you entered for existing loans.

### Debt Ratio

This is your current debt ratio, which is the total of your monthly debt payments divided by your monthly income. Values over 40% indicate you might have difficulty making payments on any additional debt or loans.

Debt Ratio Calculator

Disclaimer: These online calculators are made available and meant to be used as a screening tool for the investor. The accuracy of these calculations is not guaranteed nor is its applicability to your individual circumstances. You should always obtain personal advice from qualified professionals.