Calculate your PTI (payment-to-income) ratio from your monthly car payment and gross income, or find the maximum payment or income you need.

Income before tax.

Optional settings

PTI Ratio Formula

PTI = MP / MI × 100

Variables:

  • PTI is the PTI Ratio (%)
  • MP is the monthly payment ($)
  • MI is gross monthly income before tax ($)

To calculate loan-only PTI, divide the monthly loan payment by gross monthly income before tax, then multiply by 100. Entered insurance and other vehicle costs are shown separately in the calculator’s all-vehicle-cost ratio. Its 10%, 15% and 20% comparisons are planning examples, not universal lender limits or approval guarantees.

How to Calculate PTI Ratio?

The following steps outline how to calculate the PTI Ratio.

  1. First, determine the monthly payment ($). 
  2. Next, determine the monthly income ($). 
  3. Next, gather the formula from above: PTI = MP / MI * 100.
  4. Finally, calculate the PTI Ratio.
  5. After inserting the variables and calculating the result, check your answer with the calculator above.

Example Problem : 

Use the following variables as an example problem to test your knowledge.

monthly payment ($) = 400

gross monthly income before tax ($) = 2000

PTI = 400 / 2000 × 100 = 20%.

Frequently Asked Questions (FAQ)

What is the importance of calculating the PTI ratio?

Loan-only PTI compares a specific monthly loan payment with gross monthly income. Lenders may consider it alongside credit history, other debts and additional criteria; the ratio alone does not determine affordability or approval.

How can a high PTI ratio affect loan approval?

A higher loan-only PTI means that payment uses more of gross income. It may affect a lender’s assessment, but total debt-to-income, credit and the lender’s specific rules also matter.

What is a good PTI ratio?

There is no universal good PTI cutoff or approval guarantee. The calculator’s 10%, 15% and 20% figures are editable planning comparisons. Assess the full vehicle cost, living expenses, other debts and the actual lender’s criteria.

Can the PTI ratio be improved?

For a specific loan, PTI decreases when its monthly payment falls or gross monthly income rises. A lower payment obtained by extending the term can increase total interest, so compare total borrowing costs as well as the payment.