Back-End Ratio Calculator

Formula

To calculate the Back-End Ratio (BER):

\[ BER = \frac{D}{I} \times 100 \]

Where:

$BER$ is the Back-End Ratio (%)
$D$ is the monthly debt payments ($)
$I$ is the total monthly income ($)

What is Back-End Ratio?

A back-end ratio is defined as the ratio of the total monthly debt payments to the total monthly income of an individual or borrower. This ratio helps lenders assess the borrower's ability to manage monthly payments and repay debts.

Example Calculation 1

Let's assume the following values:

Monthly Debt Payments ($D$) = $1,500
Total Monthly Income ($I$) = $5,000

Using the formula:

Step 1: Calculate the Back-End Ratio:

\[ BER = \frac{1500}{5000} \times 100 = 30\% \]

The Back-End Ratio is 30%.

Example Calculation 2

Let's assume the following values:

Monthly Debt Payments ($D$) = $2,000
Total Monthly Income ($I$) = $6,500

Using the formula:

Step 1: Calculate the Back-End Ratio:

\[ BER = \frac{2000}{6500} \times 100 \approx 30.77\% \]

The Back-End Ratio is approximately 30.77%.