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Glossary Finance

Debt-to-income ratio (DTI)

The debt-to-income ratio (DTI) is your monthly debt payments divided by your gross monthly income, which lenders use to judge whether you can afford more credit.

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In more detail

If you pay $2,000 a month in debts and earn $6,000 gross, your DTI is 33%. Lenders often want a DTI under about 36% overall and a lower share for housing alone, though limits vary by lender and loan type. Lowering DTI means paying down debt or raising income.

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Debt-to-Income (DTI) Ratio

The Debt-to-Income (DTI) Ratio Calculator computes your front-end and back-end debt percentages based on your gross income.

House Affordability Calculator

Estimate an affordable purchase amount for a house based on either household income-to-debt estimates or fixed monthly budgets.

See also

  • Glossary Loan-to-value ratio (LTV)
    The loan-to-value ratio (LTV) is the loan amount divided by the value of the asset securing it, a key measure of lender risk.
  • Glossary Credit score
    A credit score is a number, such as 300 to 850 for FICO scores in the US.
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