Debt-to-Income Ratio Calculator: Formula, Example and What the Result Means
Calculates your debt-to-income ratio, a key test for home loan approval. This guide walks through what each input means, the formula behind the answer and a worked example using typical Australian figures. You can follow along in the free Debt-to-Income Ratio Calculator.
Why it matters
Personal credit in Australia covers car loans, personal loans, credit cards and buy now pay later. Lenders must quote a comparison rate alongside the headline rate, which bundles most fees into a single figure for a standard loan size.
What you need to enter
The calculator asks for 2 inputs. The table shows each one with the example value used later in this guide.
| Input | Example value |
|---|---|
| Total debts incl. new loan ($) | 450000 |
| Gross annual income ($) | 110000 |
The formula
DTI = total debt ÷ gross annual income.
Worked example
Entering the example values above gives these results:
| Result | Value |
|---|---|
| Debt-to-income ratio | 4.09x |
| Lender view | Below 6x |
The headline figure is 4.09x (debt-to-income ratio). Change any input in the calculator and every result updates instantly, so you can test different scenarios side by side.
How the debt-to-income ratio changes with total debts incl. new loan
The table below keeps every other input at the example value and moves only “Total debts incl. new loan ($)” up and down by 10% and 20%. It shows how sensitive the debt-to-income ratio is to that one figure.
| Total debts incl. new loan ($) | Debt-to-income ratio |
|---|---|
| 360,000 | 3.27x |
| 405,000 | 3.68x |
| 450,000 | 4.09x |
| 495,000 | 4.5x |
| 540,000 | 4.91x |
At 360,000 the result is 3.27x; at 540,000 it is 4.91x. If a small change in this input moves the answer a lot, it is worth double-checking that figure before you rely on the result.
A practical tip
APRA monitors lending at six times income or more, and many lenders cap or scrutinise loans above that level.
Keep going
Before relying on the number, read Debt-to-Income Ratio: What to Check Before You Trust the Number. You might also find these guides useful:
- How the Car Loan Calculator Works (With a Worked Example)
- Personal Loan Calculator: Formula, Example and What the Result Means
- Using a Credit Card Payoff Calculator in Australia: A Step-by-Step Guide
Frequently asked questions
- What is a comparison rate?
- It combines the interest rate and most fees into one annual rate, usually based on a $30,000 loan over five years, to make loans easier to compare.
- Do the results include fees?
- Only where a fee input is shown. Add any known fees for a more realistic total.
- Where can I get help with debt?
- The National Debt Helpline (1800 007 007) offers free, confidential financial counselling.
Run your own numbers in the Debt-to-Income Ratio Calculator.
Open the calculatorGeneral information only. Rates and thresholds change, usually on 1 July. Confirm current figures with the ATO or the relevant authority, and get personal advice for decisions about your situation.