Glossary
DTI (Debt-to-Income Ratio)
Your monthly debt payments divided by gross monthly income — the percentage lenders use to judge how much more you can borrow.
DTI — debt-to-income ratio — is the percentage of your gross monthly income already committed to debt payments. Lenders compute it in two flavors: front-end counts housing costs only; back-end adds every other obligation (car loans, student loans, card minimums). When a lender says “your DTI,” they almost always mean back-end.
The math is division with strict definitions: monthly debt payments (not balances, not living expenses) over gross income (before taxes). A $400 car payment on a $9,000 balance and a $400 student loan payment on a $60,000 balance contribute identically.
The thresholds that matter in US lending: the traditional 28/36 guideline (28% front-end, 36% back-end) marks comfortable approval territory; 43% back-end is the well-known qualified-mortgage benchmark; above it, options narrow quickly. Lower DTI also earns better pricing, not just approval.
DTI’s blind spot is that it ignores everything that isn’t a credit obligation — childcare, medical costs, taxes — so a “qualifying” DTI is not proof of an affordable life. Treat lender thresholds as ceilings, not targets. Compute yours with the DTI calculator, and see what it implies for a home budget with the affordability calculator.
Related calculators
- Debt-to-Income Ratio CalculatorCalculate your front-end and back-end DTI the way lenders do, see how you rate against the 36% and 43% thresholds, and what room you have left.
- Mortgage Affordability CalculatorFind the home price your income supports using the 28/36 rule lenders use, including your debts, down payment, taxes, and insurance.