Front-End Ratio Calculator

Calculate Front-End Ratio



Formula

To calculate the front-end ratio (\(FER\)):

\[ FER = \frac{M}{I} \times 100 \]

Where:

What is Front-End Ratio?

The front-end ratio, also known as the housing ratio, is a percentage that indicates what portion of an individual's income is allocated to housing expenses. It is calculated by dividing total monthly housing expenses, including principal, interest, taxes, and insurance (PITI), by the total monthly gross income, and multiplying by 100 to express the result as a percentage.

Example Calculation 1

Let's assume the following values:

Using the formula:

\[ FER = \frac{1200}{4000} \times 100 = 30 \% \]

The front-end ratio is 30%.

Example Calculation 2

Let's assume the following values:

Using the formula:

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

The front-end ratio is 30%.