Debt to income ratio calculator

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Updated: October 18, 2023

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Maintaining a manageable level of debt is crucial for maintaining good financial health. However, it's important to recognize the signs that your debt may be becoming unmanageable. You don’t want to find yourself unable to meet your monthly payments or experience a decline in your credit score. Thankfully, there’s a way to calculate debt to income ratio if you’re worried about accumulating an excessive amount of debt. 

Why your debt-to-income (DTI) is so important

Your debt-to-income (DTI) ratio plays a significant role in assessing your financial well-being. By calculating your DTI, you can gauge your comfort level with existing debt and make informed decisions about pursuing additional credit. As well, lenders rely on your DTI when evaluating credit applications to assess the potential risk of extending further credit to you.

Calculate debt-to-income ratio

To calculate your debt-to-income ratio, you need to sum up all your monthly debt payments and divide that total by your gross monthly income. Your gross monthly income refers to the amount of money you earn before any taxes or deductions are withheld. To make it easy for you, you can use our helpful debt-to-income ratio calculator. 

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Debt-to-Income Ratio

Use this calculator to quickly determine your debt-to-income ratio. This is the percentage of your gross income required to cover your housing and debt payments. The lower your debt-to-income ratio the more manageable your debt load will be. A low debt-to-income ratio increases the odds that you will be able to meet your monthly obligations. This ratio and your credit score are the two most important factors used by creditors when extending loans and credit.

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Information and interactive calculators are made available to you only as self-help tools for your independent use and are not intended to provide investment or tax advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

Reading the results

Here are the guidelines for reading debt-to-income ratios results:

  • A ratio of 34% or less is considered favourable, indicating manageable debt and the ability to cover monthly bills while having money left over.
  • A ratio of 35% to 45% is adequate but there’s room for improvement. Lenders may require additional eligibility criteria.
  • A ratio of 46% or higher indicates limited funds for saving or spending. This leaves little room to handle unexpected events and limits borrowing options.

What is a good debt-to-income ratio in Canada?

Lenders are generally hesitant to provide loans to individuals who are burdened with substantial debt. A high debt-to-income (DTI) ratio may lead lenders to believe that the borrower may struggle to meet their monthly payment obligations for a new loan. In Canada, lenders typically prefer borrowers with a DTI ratio that does not exceed 42%.

How to lower your debt-to-income ratio

If you’re looking for ways to reduce your DTI score, here are seven tips to try:

  1. 1.

    Create a plan to effectively pay off your credit cards.

  2. 2.

    Boost your monthly debt payments to accelerate your debt reduction. Making extra payments can significantly lower your overall debt.

  3. 3.

    Negotiate with your creditors to lower your interest rates, allowing you to save money that can be used towards helping you reach your financial goals.

  4. 4.

    Consider looking into a debt settlement program.

  5. 5.

    Avoid adding debt, as it leads to even more of a financial burden.

  6. 6.

    Move your money into a higher-interest savings account.

Explore opportunities to increase your income and improve your financial situation, such as starting a side hustle.

About our author

Amy Tokic
Amy Tokic, Associate Content Editor (SEO)

Amy Tokic is an SEO content editor for She holds a B.A. in Communications from the University of Windsor. Amy is an award-winning author and has been writing professionally for 15 years, publishing articles in the lifestyle and health sectors. She’s been a guest on many podcasts, and been quoted and sourced in publications such as Toronto Star, PopSugar, Martha Stewart Living and many more.

In her free time, Amy loves perusing used book and record stores, and chasing squirrels with wild abandon (a habit attributed to spending too much time with her pooches).


The content provided on is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.