Lenders use the debt-to-income ratio, commonly shortened to DTI, to assess how much of a borrower’s income is already committed to debt payments before a new loan is added. It is one of the first metrics evaluated in any affordability assessment, and a high ratio is one of the most common reasons for a loan application being declined or referred to a specialist lender. Despite this, most borrowers have never calculated their own DTI before applying, which means the first time they discover it is a problem is when a lender tells them so.
This tool calculates your DTI from six debt categories against gross monthly income, maps the result to four lender appetite tiers, shows which debts contribute most to the ratio, and models what consolidating multiple debts into a single secured loan could do to the figure. A net-to-gross income converter and a credit card balance-to-minimum-payment estimator are included to reduce friction for users who do not have their gross pay or card minimums to hand. All figures are illustrative and the tool does not constitute financial advice.
At a Glance
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DTI uses gross income, not take-home pay. Most people know one but not the other.
Lenders calculate DTI against gross monthly income (before tax and National Insurance), not the net figure that appears in a bank account. The tool includes a toggle that converts take-home pay to an estimated gross figure using 2025/26 UK tax and NI bands, so borrowers who only know their net pay can still get an accurate ratio without looking up their payslip. The conversion is an estimate and does not account for pension contributions, student loan deductions, or Scottish tax rates.
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The four lender tiers show where your ratio sits in the market, not just whether it is high or low.
The tool maps the calculated DTI to four tiers based on typical UK lender appetite: under 30% (wide lender choice), 30 to 40% (most lenders will consider), 40 to 50% (primarily specialist lenders), and above 50% (very limited options). These thresholds are not rules: individual lenders apply their own criteria and may weigh compensating factors such as equity, credit history, and income stability. The tiers provide a broad indication of how the ratio is likely to be received across the market.
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The consolidation scenario models the DTI impact of combining multiple debts into one payment.
When two or more non-mortgage debts are entered, the tool shows a consolidation panel that models replacing those scattered payments with a single secured loan at an illustrative rate and term. The before-and-after comparison shows the monthly payment change, the DTI change, and the total interest cost of the consolidated loan as an explicit trade-off. This is one of the most direct ways to reduce DTI, and seeing the numbers side by side makes the decision more concrete.
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DTI is one factor among several. A strong ratio does not guarantee approval and a high ratio does not guarantee rejection.
Lenders assess DTI alongside credit history, loan-to-value ratio, income stability, employment type, and the overall affordability picture. A borrower with a DTI of 35% and a poor credit history may face more limited options than a borrower with a DTI of 42% and a clean file and strong equity. The tool shows the DTI picture clearly, and the related tools listed below cover the other factors that lenders weigh in the decision.
Interactive tool
Debt-to-income ratio calculator
See how lenders are likely to view your debt relative to your income. DTI is calculated on gross (pre-tax) income, which is how most UK lenders assess it. All figures are illustrative.
Your data stays private. Nothing you enter is stored, transmitted, or accessible to anyone. All calculations run entirely in your browser.
Your gross monthly income
Your full salary before tax and National Insurance. Include overtime or commission if regular.
Your monthly debt payments
Total minimum payments across all cards
Not sure? Estimate from your balance insteadTotal credit card balance
Typical card APR
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PCP, HP, or lease payments
Check your payslip for the monthly deduction
Child maintenance, BNPL, DMP payments, overdraft fees
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Where your DTI sits against typical lender thresholds
How your debt payments break down as a share of gross income
Biggest DTI improvements available
DTI thresholds shown are typical across the UK lending market and vary by lender. A ratio within a given band does not guarantee approval or rejection. Lenders consider DTI alongside credit history, LTV, income stability, and other factors. The net-to-gross conversion uses 2025/26 tax and National Insurance bands and is an estimate only. This tool does not constitute financial advice. All figures are illustrative only.
About this tool
What it calculates
DTI ratio, lender tier, debt breakdown, and consolidation impact
Enter monthly debt payments across six categories against gross monthly income. The tool calculates the DTI as a percentage, maps it to one of four lender appetite tiers, shows which debt category contributes most to the ratio, identifies the three biggest potential improvements from clearing individual debts, and models a consolidation scenario when two or more non-mortgage debts are present.
Key features
Net-to-gross converter, card balance estimator, and joint application support
A toggle converts take-home pay to estimated gross income using 2025/26 UK tax and NI bands. A credit card balance helper estimates minimum payments from outstanding balances. Joint application mode combines two incomes for the DTI denominator. An optional proposed borrowing section models the DTI impact of a new loan before applying.
How to use the debt-to-income ratio calculator
The tool is designed to work with figures most borrowers already know or can find quickly. The income section uses gross pay, but the net-to-gross toggle handles the conversion if only take-home pay is available. The debt section uses monthly payment amounts, not outstanding balances, because DTI is a ratio of payments to income. The card balance helper bridges the gap for borrowers who know what they owe on cards but not what their minimum payment is.
Enter your gross monthly income
Use the income slider to set your gross monthly income: this is the figure before tax and National Insurance, not the amount that reaches your bank account. If you only know your take-home pay, toggle “I only know my take-home pay” and the tool will estimate the gross equivalent using current UK tax bands. For joint applications, toggle “Add a second applicant” to include a second income. DTI is calculated on the combined gross figure, which is how most lenders assess joint applications.
Enter your monthly debt payments
Set the slider for each debt category to the monthly payment amount: mortgage or rent, credit card minimum payments, personal loans, car finance, student loan, and other commitments such as child maintenance or BNPL. Use the actual minimum payment for credit cards, not the amount you choose to pay each month, because lenders assess DTI on the contractual minimum. If you are not sure of your card minimum, click “Not sure? Estimate from your balance instead” to open the balance helper, which calculates the estimated minimum from your total card balance and a typical APR.
Optionally model proposed new borrowing
If you are considering a new loan and want to see how it would affect the ratio, toggle “Include proposed new borrowing” and set the amount, APR, and term. The tool calculates the monthly payment and adds it to the DTI. A before-and-after comparison appears showing the current DTI alongside the projected figure with the new loan included. This is useful for testing whether a specific borrowing amount would push the ratio into a different lender tier.
Review the results, breakdown, and consolidation scenario
The result panel shows the DTI percentage, the lender tier classification, and three summary tiles. The tier guide bar shows where the ratio sits visually. The breakdown bars show each debt category’s individual contribution to the ratio. The impact section identifies the three debts that would reduce the DTI most if cleared. If two or more non-mortgage debts are present, the consolidation scenario panel appears at the bottom, modelling what replacing those debts with a single secured loan would do to the monthly payment and the DTI.
What DTI means and why lenders use it
The debt-to-income ratio is the total of all monthly debt payments divided by gross monthly income, expressed as a percentage. A borrower earning £3,500 per month gross with debt payments totalling £1,050 per month has a DTI of 30%. The metric tells lenders what proportion of income is already committed before a new payment is added, which is one of the clearest indicators of whether additional borrowing is sustainable. It is used across secured loans, unsecured personal loans, credit cards, and mortgages, though the thresholds that different lenders apply vary by product type and risk appetite.
The reason DTI uses gross income rather than net is convention: gross income is the standardised figure that can be verified through payslips, P60s, and tax returns, and it removes the variation caused by differing pension contribution rates, student loan plan types, and other pre-tax deductions that change the net figure without affecting the borrower’s underlying earning capacity. This is why the tool defaults to gross and provides the net-to-gross converter as a helper rather than the other way around. The guide to what secured loan lenders look for covers how DTI fits into the broader underwriting process alongside LTV, credit history, and employment type.
Understanding the lender tier thresholds
The four tiers used in the tool are based on broadly typical thresholds observed across the UK secured lending market. They are not rules, and individual lenders may accept applications above or below these boundaries depending on the full application profile. The tiers represent general market appetite rather than specific lender criteria, which is why the tool describes them in terms of how wide the lender choice is at each level rather than whether an application will be accepted or rejected.
A DTI under 30% typically means the borrower has a comfortable margin between committed payments and income, and most mainstream lenders will view this favourably. Between 30% and 40%, the ratio is still within the tolerance of most lenders but may attract closer scrutiny of the overall affordability picture, particularly if other risk factors such as a limited credit history or high LTV are present. Between 40% and 50%, the mainstream lender pool narrows and specialist providers, including second charge mortgage lenders, become the more likely route. Above 50%, options are very limited: this is the level at which most lenders will decline, and the most practical route is usually to reduce existing commitments before applying. The credit profile classifier covers the credit history dimension of lender matching, which interacts with DTI in the overall assessment.
How the consolidation scenario works
The consolidation panel appears when two or more non-mortgage debt categories have payments entered. It models a specific scenario: replacing the separate credit card, personal loan, car finance, student loan, and other debt payments with a single consolidated loan at a rate and term chosen by the user. The tool shows the combined monthly cost of the existing debts, the monthly cost of the consolidated loan, the DTI before and after, and the total interest cost of the consolidated loan over the full term.
The total interest figure is included deliberately as a trade-off disclosure. Consolidation often reduces the monthly payment, which improves the DTI and frees up monthly cash flow, but it achieves this by spreading the debt over a longer term, which increases the total interest paid. A borrower consolidating £12,000 of unsecured debt at 22% APR into a secured loan at 7% APR over ten years will pay a lower monthly amount and a lower rate, but the longer term means the total interest cost may be comparable or even higher than repaying the original debts on their existing schedules. The debt consolidation saving and true cost calculator models this trade-off in full detail, including comparisons across different term and rate combinations. The guide to whether debt consolidation is right for you covers the broader considerations beyond the numbers.
Beyond DTI: other factors lenders consider
DTI is one input in an affordability assessment, not the whole picture. A borrower whose DTI sits comfortably within the low-risk tier may still face limited options if the credit history includes defaults, CCJs, or a thin file with limited borrowing history. Equally, a borrower with an elevated DTI may find more flexibility if the credit profile is clean, the income is stable and well-evidenced, and the loan-to-value ratio on the property is conservative. Lenders weigh these factors together rather than applying a single DTI threshold as a pass-or-fail gate.
For borrowers preparing a secured loan application, the most useful preparation is to know all the key metrics before a broker or lender runs the assessment: DTI (this tool), credit profile (the credit profile classifier), LTV position (the LTV and equity calculator), and monthly affordability (the monthly affordability checker). Knowing these figures in advance means the application is more likely to be directed to a lender whose criteria match the profile, which reduces the risk of a declined application and an unnecessary hard credit search.
Related tools
Affordability
Monthly affordability checker
DTI tells lenders how committed your income is. The affordability checker goes further: it stress-tests a specific loan payment against your full budget, including living costs, and models what happens if rates rise or income falls. Use it after this tool to test whether a specific loan amount is sustainable. Use the tool
Debt overview
Total debt picture tool
If you want a more detailed view of your overall debt position, including outstanding balances, time to repayment, and highest-cost debts ranked by APR, the total debt picture tool maps the full landscape. It complements the DTI calculator by showing the balance side of the equation rather than the payment side. Use the tool
Looking for more loan resources?
Guides and tools covering secured loans, debt consolidation, and home improvementsFrequently asked questions
Why does the tool use gross income rather than take-home pay?
Gross income is the standard basis for DTI calculations across the UK lending market. Lenders use gross rather than net because it is the figure that can be independently verified through payslips, P60s, and HMRC tax calculations, and it provides a consistent basis for comparison that is not affected by variations in pension contribution rates, student loan plan types, or salary sacrifice arrangements. Two borrowers with the same gross income but different net incomes due to different pension contributions have the same earning capacity from a lender’s perspective, which is why gross is the standardised metric.
The net-to-gross toggle is included because many borrowers monitor their finances in net terms and do not have their gross figure to hand. The conversion uses 2025/26 income tax bands (20%, 40%, 45%) and employee National Insurance rates (8% and 2%) to estimate the gross equivalent. It does not account for pension contributions, student loan deductions, or Scottish income tax rates, all of which affect the net figure without changing the gross. For borrowers in Scotland or those with significant pre-tax deductions, using the actual gross figure from a payslip will produce a more accurate result than the converter.
How does the card balance estimator calculate the minimum payment?
The estimator uses the formula that most UK credit card providers apply: 1% of the outstanding balance plus one month’s interest at the card’s APR, with a floor of £25. On a balance of £5,000 at 22% APR, the monthly interest component is approximately £92 and 1% of the balance is £50, giving an estimated minimum of £142. The £25 floor applies to very small balances where the percentage-based calculation would produce a lower figure. The estimator rounds up to the nearest pound to reflect the way most card providers round minimums.
This is an estimate rather than an exact figure because card providers vary in how they calculate minimums: some use 2% of the balance without a separate interest component, some apply different floors, and some round differently. For borrowers with multiple cards, the estimator takes the total balance across all cards and a single representative APR. If your cards carry different rates, using the weighted average APR will give a closer estimate, though for DTI purposes the precise minimum matters less than getting into the right broad range. The actual minimum payments shown on your card statements are always the most accurate figures to use if they are available.
Does DTI include my mortgage or rent payment?
Yes. The mortgage or rent payment is typically the largest single component of DTI for most borrowers and is always included in the calculation. Lenders include it because it represents a fixed monthly commitment that reduces the income available for other debt payments. For homeowners, the mortgage payment is the contractual monthly amount including interest but not including buildings insurance, service charges, or council tax. For renters, the monthly rent figure is used. Both serve the same purpose in the calculation: they represent the housing cost that the borrower is committed to paying each month.
When modelling a debt consolidation loan through the consolidation scenario, the mortgage is excluded from the debts being consolidated. This is because the consolidation scenario models replacing unsecured and other non-mortgage debts with a single secured loan, not replacing the mortgage itself. The mortgage remains in the DTI calculation as a fixed commitment, and the consolidation payment replaces only the non-mortgage debts. This reflects how consolidation typically works in practice: the mortgage continues separately while the other debts are combined into a new product.
What is a good debt-to-income ratio for a secured loan in the UK?
There is no single answer because lender criteria vary, but the broad pattern across the UK secured lending market is that a DTI under 40% provides the widest range of options. Below 30%, most mainstream and specialist lenders will view the ratio favourably, and the DTI is unlikely to be the constraining factor in the application. Between 30% and 40%, options remain broad but the lender may look more closely at the overall profile. Above 40%, the pool of willing lenders narrows, and above 50% very few lenders will proceed without a strong compensating factor such as substantial equity or an exceptionally clean credit history.
For bad credit borrowers, the DTI thresholds tend to be applied more tightly because the credit profile already represents an elevated risk factor. A borrower with adverse credit and a DTI above 40% faces a significantly narrower market than a borrower with the same DTI and a clean file. The guide to secured loans for bad credit covers how these factors interact in practice. For self-employed borrowers, where income evidence is more complex, some lenders apply their own income calculation before deriving the DTI, which can produce a different figure from the one the borrower expects: the self-employed income classifier explains how different income structures are typically assessed.
How does the consolidation scenario work and is it realistic?
The consolidation scenario models a specific and common situation: a borrower with multiple non-mortgage debts at different rates and terms replaces them all with a single secured loan. The tool sums the monthly payments on the debts being consolidated, calculates the monthly payment on the consolidated loan at the amount, rate, and term the user selects, and shows the monthly saving or increase alongside the DTI change. The total interest cost of the consolidated loan is shown as a trade-off figure so the user can see the long-term cost of spreading the debt over a longer term.
The scenario is realistic in the sense that debt consolidation through a secured loan is one of the most common uses of second charge lending in the UK. However, the illustrative rate and term used in the tool may not match the rate and term a lender would actually offer, which depend on credit profile, LTV, income evidence, and the lender’s own pricing. The scenario should be treated as a directional model, showing what consolidation could do to the DTI at a given rate, rather than a prediction of what a specific lender would offer. The debt consolidation saving and true cost calculator provides a more detailed model for borrowers who want to explore specific scenarios in depth.
Squaring Up
The debt-to-income ratio is one of the simplest and most useful pre-application checks a borrower can run. Knowing the figure before approaching a lender or broker means the application can be directed to products and lenders whose criteria match the profile, which reduces the risk of a declined application and an unnecessary hard credit search. The net-to-gross converter and card balance estimator remove the two most common friction points in calculating the ratio, and the consolidation scenario shows the most direct route to reducing it where multiple debts are contributing.
DTI is not the whole picture. Credit history, LTV, income stability, and employment type all interact with the ratio in the lender’s assessment. The tools linked below cover these other dimensions, and using them together provides a more complete view of borrowing readiness than any single metric can offer on its own.
Explore all loan guides and tools
Everything in one place, across secured loans, debt consolidation, and home improvementsThis tool is for illustrative purposes only and does not constitute financial advice. DTI thresholds shown are typical across the UK lending market and vary by lender. A ratio within a given band does not guarantee approval or rejection. The net-to-gross income conversion uses 2025/26 income tax and National Insurance bands and is an estimate only: it does not account for pension contributions, student loan deductions, or Scottish income tax rates. The credit card minimum payment estimator uses a representative formula and may not match the minimum shown on individual card statements. The consolidation scenario models an illustrative outcome and does not represent a loan offer or rate guarantee. Your home may be at risk if you do not keep up repayments on a secured loan. Actual outcomes will depend on your individual circumstances.
