Debt to Income Ratio Calculator Canada - Debt.ca (2024)

Using the Debt to Income Ratio Calculator

Start by entering your monthly income. This is the total amount of net income you make in a month. We use net (after-tax) instead of gross (before tax) because you make debt payments with money after taxes.

Do you have a part-time job or earn money from a side hustle? Click the “Add Monthly Income” button to add other income types. Income types you can add include the following:

• your and your spouse’s monthly income
• alimony/child support
• pension/retirement benefits
• government assistance
• other income

Below that in the next section, enter your total monthly debt payments. The various types of debt include the following:

• rent/mortgage
• car loan
• car insurance
• health insurance
• alimony/child support
• credit cards
• student loan
• medical/dental bills
• appliance/furniture and other payments

Click the “Add Monthly Debt Payments” to add as many debts as you like.

Once you’ve completed all the required fields, click the “calculate” button to compare your monthly income to your monthly debt payments.

Reading the Results

When your debt-to-income (DTI) ratio is low, you can easily pay your bills and reach your financial goals. But when your DTI ratio is high, you are spending more money than you can afford to and are left with little for saving.

Under the heading “Results,” you can see a pie chart of your debt to income ratio. It shows your total income, total debts, and your debt ratio. Here’s how the debt ratio is rated:

• Good: 36 percent or less
• Manageable: 37 percent to 42 percent
• Cause for concern: 43 percent to 49 percent
• Dangerous: 50 percent or more

Not sure which debt solution is right for you? Click the button at the bottom of the calculator to get your free savings estimate.

It’s important to note that high debt to income ratio may not be an immediate cause for concern. It all depends on your age and where you are in your career.

For example, if you’re a millennial who recently bought their first home and your peak earning years are still ahead of you, it’s understandable and expected that you’d have a high debt to income ratio. You should be able to manage it as long as interest rates don’t shoot up and you continue to steadily increase your pay.

However, if you’re a baby boomer nearing retirement or you’re on a fixed income, a high debt to income ratio can be concerning and require further attention to help get your debts under control.

Add the Debt-To-Income Ratio Calculator to your own Website for Free

Would this calculator be useful to your visitors? You can quickly and easily put the debt-to-income ratio calculator on your website by visiting the debt widgets page of our website. This will provide value to your visitors by helping them determine how much their debt-to-income ratio is.