You estimate your monthly mortgage principal and interest will be $1,000, property taxes will be $160 per month, and homeowner's insurance will be $50 per month. If your gross monthly income is $4,000 per month and your tax rate is 20 percent, what is your mortgage debt service ratio?

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Quizplus · Accepted Answer

The mortgage debt service ratio is calculated by dividing the total monthly mortgage payment (principal, interest, taxes, and insurance) by the gross monthly income. Here, the total monthly payment is $1,000 + $160 + $50 = $1,210. The ratio is $1,210 / $4,000 = 0.3025 or 30.25%.

You Estimate Your Monthly Mortgage Principal and Interest Will Be