Finance Tools
Farm Debt-to-Income Ratio Calculator
Calculate farm debt-to-income (DTI) ratio using annual debt payments and farm income. Includes operating vs long-term debt split and a quick coverage view to assess borrowing capacity.
Farm DTI (debt-to-income) estimates how much of your annual income goes to debt payments. This version also splits operating vs long-term debt and shows a simple coverage view using income minus operating expenses.
Use gross income or net income—just be consistent when comparing over time.
Operating note / line of credit payments.
Land loans, equipment loans, mortgages, etc.
Seed/feed, fertilizer, fuel, labor, utilities, repairs, insurance, etc.
Total debt payments
$60,000
Debt payment share of income (DTI)
24.0%
Operating debt share: 30.0%
Long-term debt share: 70.0%
Operating surplus (income − operating expenses): $80,000
Coverage (surplus ÷ debt payments): 1.33
Tip: DTI answers “how heavy is debt relative to income,” while coverage answers “can surplus service the payments.”
How it works
- DTI (%) = (annual debt payments ÷ annual income) × 100
- Split operating vs long-term debt to see what’s driving the ratio
- Coverage uses (income − operating expenses) as a quick “payment capacity” check
FAQ
What is a “good” farm DTI?
It depends on commodity volatility and margins. Lower is safer, but the key is whether your surplus covers payments through down cycles.
Should I use gross income or net income?
Either works if you stay consistent. Gross is common for quick screening; net is stricter.
How to use this farm debt-to-income ratio calculator
- Enter your annual farm income (gross or net, but be consistent).
- Enter annual operating debt payments (operating loan/line of credit).
- Enter annual long-term debt payments (land, equipment, mortgages).
- Review DTI ratio, debt payment share, and coverage indicators.
Example
Example farm DTI calculation:
- Annual income: $250,000
- Operating debt payments: $18,000
- Long-term debt payments: $42,000
- Total debt payments: $60,000
- DTI: 24.0%
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