Your debt-to-income ratio is equal to your monthly debt payments divided by monthly income.
DTI = monthly debt / monthly income
The first step in calculating your debt-to-income ratio is determining how much you spend each month on debt.
To start, add up what you spend each month on the following:- Mortgage or rent
- Minimum credit card payments
- Car loan
- Student loans
- Alimony/child support payments
- Other loans
This is the total amount you spend each month on debt.
Example:
Let's assume Sam has the following expenses:- mortgage = $950
- minimum credit card payments = $235
- car loan = $355
Sam's total monthly debt payments = $1,540
