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Debt-to-income ratio calculator

Work out your debt-to-income ratio and housing cost share. Australian lenders assess serviceability with a rate buffer and flag a DTI above 6× income as high risk.

By Mitch Duncan Last reviewed Methodology

Your income & debts

Mortgage or rent, plus property tax, building/home insurance, and any HOA / strata / service charge.

Car loans, student loans, credit-card minimums, personal loans. Exclude utilities, groceries, and other living costs.

Sum of all balances incl. mortgage. Used for the income-multiple measure your lenders lead with.

Australian lenders assess serviceability with an interest-rate buffer (around 3%). A debt-to-income ratio above 6× gross income is treated as high risk.

Housing cost ratio
25.0%
Total debt ratio
35.0%
Within lender guidelines

Your total-debt ratio of 35% is at or below the 45% lenders look for — a healthy position that should qualify you with most lenders.

Lender guidelines — AU
Housing cost ratio — recommended max
30%
Total debt ratio — recommended max
45%
Income multiple — typical cap
6.0×

DTI uses gross (pre-tax) income, the same basis lenders apply. It's a guide — actual approval also depends on credit history, deposit, employment, and the lender's own stress test.

Want the full picture? How Much House Can I Afford? The 28/36 Rule Explained →

Serviceability and the 6× DTI flag

Australian lenders assess serviceability — whether you can comfortably meet repayments — rather than applying one fixed DTI cutoff. APRA requires lenders to test your budget against a serviceability buffer of around 3% above the loan's actual rate, and a debt-to-income ratio above 6× gross income is treated as high risk and reported to the regulator.

DTI multiple = total debt ÷ gross annual income

How the assessment works

Lenders tally your income, subtract living expenses (often benchmarked using the HEM index), existing debt repayments, and the new loan's repayment at the buffered rate. What's left is your serviceability surplus. A high credit-card limit counts against you even if the balance is zero, because lenders assume it could be drawn.

Worked example

Gross income $9,000/month ($108,000/year) with $560,000 of total debt gives a DTI of about 5.2× — under the 6× high-risk line, but lenders will still run the full buffered serviceability test.

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Frequently asked questions

What is a debt-to-income ratio?
Your debt-to-income (DTI) ratio is the share of your gross monthly income that goes toward debt payments. Divide your total monthly debt by your gross monthly income and multiply by 100. Lenders use it to judge whether you can comfortably afford to take on more borrowing — the lower your DTI, the more room you have.
What's the difference between front-end and back-end DTI?
The front-end ratio counts only housing costs — mortgage or rent, property tax, insurance, and any service charge — against your gross income. The back-end ratio counts all your debt: housing plus car loans, student loans, credit-card minimums, and personal loans. The back-end ratio is usually the figure lenders use to make a decision.
What's a good debt-to-income ratio?
Lower is better. As a general guide, a back-end ratio at or below the mid-30s percent is considered healthy, the low-40s is borderline, and above the mid-40s makes borrowing harder. The exact limits depend on your country and lender — the calculator above compares your ratio to the thresholds used in your region.
Does DTI use gross or net income?
Gross income — your pay before tax and deductions. Lenders use gross income because it's the consistent figure shown on payslips and tax returns. Bear in mind your real budget is tighter than your DTI suggests, since tax and other deductions come out before you see the money, so staying well under the limit leaves breathing room.
What debts are included in the calculation?
Include recurring debt: your mortgage or rent, car loans, student loans, credit-card minimum payments, personal loans, and any court-ordered payments like child support. Exclude everyday living costs such as utilities, groceries, insurance (other than on your home), subscriptions, and discretionary spending — those aren't debts.
How can I lower my debt-to-income ratio?
Pay down or clear debts with high monthly payments — removing a car loan or credit-card balance takes its payment out of the ratio entirely. Avoid taking on new debt in the months before applying for a mortgage, and increasing your income raises the bottom of the ratio. Refinancing to a longer term lowers the monthly payment too, though it can cost more interest overall.

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