Debt to Income Mortgage Calculator

Your Debt to Income (DTI) ratio is one of the factors lenders use when assessing your ability to manage monthly mortgage repayments and repay borrowed money.

Our free debt to income mortgage calculator can help you to understand whether your current income will meet the requirements for a typical mortgage lender, when your existing outgoings are considered:

What is a Debt to Income (DTI) ratio?

Your DTI ratio represents the percentage of your gross monthly income that goes toward paying your fixed monthly debts. For mortgage lenders, this is a primary indicator of affordability.

Even if you have a high income, a high DTI ratio could suggest that you are stretched too thin financially. This can make you a higher risk in the eyes of a lender, and may impact the rates available to you, or how much you can borrow.

How to use the DTI mortgage calculator

To get an accurate result, you will need to gather a few figures and enter them into the fields on this calculator:

1. Gross monthly income: This is your total pay before taxes or other deductions. If you are self-employed, this is usually based on your net profit

2. Existing monthly debts: Include the minimum payments for all financial commitments, such as:

   • Car finance

   • Personal loans

   • Minimum credit card payments

   • Student loan repayments

   • Child maintenance or any other court ordered payments

Do not include rent, utilities, food, or general living expenses

3. Projected mortgage payment: Enter the repayments for your potential mortgage borrowing. You can calculate repayments using our repayment calculator, if you’re unsure

How does this calculator work?

We divide your total monthly debt payments by your gross monthly income and multiply by 100 to get a percentage. It will then display your DTI as a ration, along with a colour grading (traffic light system) to determine, on average, how lenders view this level of DTI. 

Most mortgage lenders prefer a DTI ratio below 40%, though some specialist lenders may accept higher ratios depending on your overall financial situation.

If your DTI is higher than this, it doesn't always mean you won't be able to get a mortgage, but it's best to speak to a mortgage broker with experience in high DTI applications before you begin.

Calculations all done? Secure your mortgage today

Get Started

How lenders assess your outgoings

UK lenders look at two main figures when assessing your outgoings against your total income in a mortgage application:

• Loan-to-Income (LTI) - the total amount you borrow vs. your total income

• Affordability - your monthly outgoings vs. your monthly take-home pay - they will use the DTI ratio as part of this calculation

What is a good DTI and LTI for a UK mortgage?

While there isn't a legal cap, having your total monthly debt payments, including the new mortgage, equate to less than 35% of your gross income puts you in a strong position for the best rates.

If you have a higher DTI this doesn’t necessarily mean that you won’t be able to get a mortgage, however, you may find that you’re offered a lower LTV (Loan to value) amount, or that you pay higher interest rates.

The below is based on average lender criteria, but keep in mind that these limits vary from one lender to the next:

• Low DTI - 0-20%: Lenders will generally view you as a low-risk borrower, and you should have access to the widest range of mortgage and loan products
• Moderate DTI - 20-40%: Most lenders will still consider this level of debt acceptable, but it may start to limit how much you can borrow
• High DTI - 40-60%: Many lenders will see this as higher risk, and your borrowing options may be more limited
• Very High DTI  - 60%+: Borrowing further will be very difficult with most lenders

Tips to improve your DTI ratio

If our calculator shows your ratio is higher than 40%, don't panic. There are several ways to improve your standing before you apply:

1. Pay down small balances: Focus on clearing small credit card balances or short-term loans to reduce your total monthly debt obligations

2. Avoid new credit: Do not take out any form of new credit, such as car loans or store cards in the months leading up to a mortgage application

3. Increase the deposit: A larger deposit reduces the amount you need to borrow, and therefore the risk in lending

4. Include all income: Ensure you are including all consistent sources of income, such as bonuses, commissions, or dividends. Some lenders also consider benefit payments alongside your earned income

5. Use your rent as proof: If you’ve been renting before you buy, some lenders will accept a history of high rent payments as evidence that you can afford a mortgage of a similar or slightly higher amount, even if your DTI is borderline

Speak to an affordability expert

Every lender calculates affordability differently. Some specialist lenders are more flexible with high DTI ratios, especially if you have a strong credit history or significant assets.

Not sure if you qualify? Get started to speak with a knowledgeable broker who can review your DTI and help find the right lender for your financial situation.