Bureau of Wealth

Debt-to-Income Ratio Calculator

By the Bureau of Wealth team Updated

This calculator is general information, not financial advice. Check your own figures with the provider or a qualified adviser before acting on them.

Enter your gross monthly income, your rent or mortgage payment and your other monthly repayments to see your debt-to-income ratio and the share of income your housing takes on its own.

Before tax and other deductions.

Other monthly debt payments

Check the highlighted fields to see your results.

What this calculator assumes

  • Income is gross monthly income, before Income Tax, National Insurance, pension contributions and other deductions.
  • Repayments are the amounts you must pay each month, such as the minimum on each credit card and your car finance instalment, not the balances you owe.
  • Rent or mortgage is included in the ratio. Council Tax, energy bills, childcare and other living costs are not, even though lenders look at them too.
  • There is no pass or fail line. UK lenders do not use one published ratio, so the result is a way to see how stretched your budget is, not a lending decision.
  • If you apply jointly, add both incomes and all the repayments you share or each pay.

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How the ratio is worked out

A debt-to-income ratio is your monthly housing payment plus your other monthly debt repayments, divided by your gross monthly income. The calculator adds the figures you enter, divides by your income and shows the result as a percentage. It also shows your rent or mortgage payment on its own as a share of income, so you can see how much of the ratio is housing and how much is other borrowing.

A worked example

Say you earn £4,000 a month before tax. Your rent is £1,100, your car finance is £250 a month and your credit card minimums come to £60. Your repayments total £1,410, so your debt-to-income ratio is 35.3%, and rent alone takes 27.5% of your income. Once the car finance ends, the total falls to £1,160 and the ratio drops to 29%.

How UK lenders assess affordability

In the UK, lenders do not usually decide on a single ratio. The Financial Conduct Authority requires a consumer credit lender to carry out a reasonable creditworthiness assessment before lending, which includes considering whether you can make the repayments as they fall due over the life of the agreement. Unless it is obviously unnecessary, the lender must take reasonable steps to find out your income and your non-discretionary spending, and it should not generally rely only on what you tell it about your income without independent evidence.

For mortgages, MoneyHelper explains that lenders decide how much you can borrow by looking at your income, your outgoings and the security of your employment. Outgoings include your other debt repayments, household bills and living costs, and lenders also stress test whether you could still afford the repayments if interest rates rose. Each lender has its own criteria.

Why the ratio is still worth knowing

Because repayments on existing debt are part of every affordability check, the ratio is a quick way to see how much room your budget has before you apply. A lower figure means more of your income is free for living costs, saving and any new borrowing. A high one is a sign to pay down debt or wait before taking on more, whatever a lender might approve.

If you want to bring the ratio down, the debt repayment calculator shows which debts to clear first and when their monthly repayments would end.

Frequently asked questions

What is a good debt-to-income ratio in the UK?

There is no official figure. UK lenders assess affordability using your income, outgoings and circumstances rather than a single published ratio, and each sets its own criteria. In general, the lower the share of your income already committed to repayments, the more room you have.

What should I count as debt repayments?

Include credit card minimums, personal loans, car finance, overdraft repayments you have agreed, buy now pay later instalments and student loan repayments you pay directly. Rent or a mortgage goes in the housing box.

Should I use gross or take-home pay?

This calculator uses gross pay, before tax and other deductions. Your take-home pay is what actually covers your bills, so it is worth also checking your repayments against it when you budget.

Why would a lender turn me down if my ratio looks low?

Lenders look at far more than one ratio, including your credit history, your spending on bills and living costs, and how secure your income is. For a mortgage they also test whether you could cope if interest rates rose.

How can I lower my ratio?

Clear or reduce debts so their monthly repayments end, avoid new borrowing before you apply, or increase your income. Clearing a small debt completely removes its whole repayment from the calculation.

Sources

Figures come from institutions millions of people rely on. How we keep calculators accurate.