Debt to income ratio

Debt to income ratio is calculated by dividing your total monthly debt payments by your total month gross income โ€“ the amount you earn before taxes are withheld.

For example, if you earn $5,000 per month and your monthly payments including housing, car payment, revolving debt payments and any other loan payment) equaling $2,500, your debt to income ratio is 50% – one half of your gross monthly earnings.