Enter your income before tax and what you pay each month on loans and credit cards. You get your debt-to-income ratio, what is left after those payments and, if your lender gives you a limit, how far you are from it. Add a mortgage amount to see it as a multiple of your yearly income, the measure the Bank of England uses to limit high loan-to-income lending.
Enter your income
Enter your income before tax and National Insurance, per year or per month: a yearly figure is divided by 12. For a joint application, add together the incomes of everyone applying. Lenders also look at your take-home pay and your spending when they check affordability, so ask yours which income it uses.
Add your monthly payments
Count what you pay each month on the debts you will keep: a mortgage, personal loans, car finance, hire purchase, the minimum payments on credit cards and store cards, and any regular overdraft repayment. Add the payment on the loan you are applying for to see your ratio once it is granted. Rent, bills and everyday spending are not debt repayments, so they are not in this ratio, although a lender will look at them in its affordability check.
Compare with a limit
No UK rule sets a maximum debt-to-income ratio. Lenders must show that a mortgage is affordable, taking into account your income and at least your committed and basic household spending, and each lender sets its own criteria. If yours quotes a limit, choose ‘Other’ and enter it to see your room under it. The Bank of England does limit how many new mortgages can be at 4.5 times income or more: enter a mortgage amount to see where yours stands. These rules are the same in England, Wales, Scotland and Northern Ireland.
Rounding and reusing the result
The ratio is shown to two decimal places, with halves rounded up, and is compared with a limit before rounding. Amounts are rounded to the nearest penny, except the most you could pay, rounded down so that it never goes over the limit, and the income needed, rounded up. Copy the workings in one click, export the result as a CSV file or save it to Priostack.
Debt-to-income ratio = total monthly debt payments ÷ gross monthly income × 100.
Most you could pay = monthly income × your lender’s limit.
Loan to income = mortgage amount ÷ gross yearly income.
Example: £42,000 a year, car finance and a credit card
You earn £42,000.00 a year before tax, which is £3,500.00 a month, and pay £320.00 a month on car finance and £85.00 on credit cards. Your payments total £405.00, so your debt-to-income ratio is £405.00 × 12 ÷ £42,000.00 × 100 = 11.57%, leaving £3,095.00 a month after them. A £189,000.00 mortgage would be £189,000.00 ÷ £42,000.00 = 4.5 times your income: at the Bank of England’s threshold of 4.5, so it counts as high loan-to-income lending.
