Price To Income Ratio Calculator

Purchase Price ($):
Yearly Income ($):
Calculate

The Price To Income Ratio (PTI) is:

 

Introduction

The Price To Income Ratio (PTI) is a financial metric used to evaluate the affordability of a property by comparing the purchase price to the yearly income of an individual or household. This calculator will help you determine the missing value in the PTI calculation by entering any two variables: purchase price and yearly income.

How to Use

1. Enter the purchase price of the property in dollars ($).
2. Enter the yearly income of the individual or household in dollars ($).
3. Click the “Calculate PTI” button to find the Price To Income Ratio.

Formula

Price To Income Ratio (PTI) is calculated using the following formula:

Example

Suppose the purchase price of a property is $250,000, and the yearly income is $60,000. To find the Price To Income Ratio (PTI), use the following steps:

1. Enter the purchase price: $250,000
2. Enter the yearly income: $60,000
3. Click the “Calculate PTI” button.

The calculator will provide the result: PTI = 4.17.

Frequently Asked Questions (FAQs)

Q1: What is the Price To Income Ratio (PTI)?

A1: The Price To Income Ratio (PTI) is a financial metric used to assess the affordability of a property by comparing the purchase price to the yearly income.

Q2: How is the PTI calculated?

A2: The PTI is calculated using the formula: PTI = (Purchase Price / Yearly Income).

Q3: What does a high PTI indicate?

A3: A high PTI indicates that the property is less affordable in relation to the income, which may not be a good financial decision.

Conclusion

The Price To Income Ratio Calculator is a valuable tool for individuals and households to assess the affordability of a property. By comparing the purchase price to yearly income, you can make more informed decisions about your real estate investments.