Quick answer: With a gross income of 20,000 a month and payments of 4,000 (housing), 1,500 (car) and 500 (cards), your debt-to-income ratio is 6,000 ÷ 20,000 = 30%, and the housing ratio is 20%.
How it's calculated
DTI = total monthly debt payments ÷ gross monthly income × 100. Count every regular repayment: home finance or rent if your lender counts it, car finance, minimum card payments, personal loans. Daily living costs are not included.
The housing (front-end) ratio counts only the housing payment. The total (back-end) ratio counts everything and is the one most limits apply to.
Limits differ by country. In Saudi Arabia, SAMA's Responsible Lending Principles cap repayments deducted from salary at 33.33% of gross salary for employees and 25% for retirees; when home finance is included, total obligations may reach 55% or 65% of income, depending on salary. In the UAE the Central Bank caps all instalments, credit cards included, at 50% of gross salary and other regular income. US lenders often look for 36% or less, and 43% has been a common ceiling for mortgages.
Planning a home purchase? The house affordability calculator turns a DTI limit into a price.
Worked examples
- Income 20,000; payments 4,000 + 1,500 + 500: 6,000 ÷ 20,000 = 30%
- Income 15,000; payments 7,500: 7,500 ÷ 15,000 = 50%
Common limits
| Where | Limit |
|---|---|
| Saudi Arabia (SAMA, consumer finance) | 33.33% of salary |
| UAE (Central Bank, total debt) | 50% of salary |
| US (common guideline) | 36% total, 43% mortgage ceiling |
Frequently asked questions
Gross or net income?
US lenders use gross income before tax. In the Gulf, salaries are usually tax-free, so gross and net are close; banks use the salary transferred to them, including fixed allowances.
Does rent count?
Rent is not a debt, so many lenders leave it out of the total ratio; for a home purchase they replace it with the new home-finance payment.
How can I lower my DTI?
Pay off or consolidate small debts, avoid new finance before applying, or increase income. The debt consolidation calculator shows whether one loan would lower your payments.
What is a good debt-to-income ratio?
Lower is better, and many lenders are comfortable under about 36%. Limits vary by country and bank, so check your lender's rule.
Should I include daily living costs?
No. Only regular debt payments count. Food, utilities and school fees are left out, even though you should still budget for them.
What is the housing ratio in the result?
Your housing payment divided by gross income. Lenders often look at this and the total ratio separately.