43% max for most loans
Debt-to-income ratio: what lenders actually see
Debt-to-income (DTI) ratio is total monthly debt payments divided by gross monthly income. Lenders look at two: front-end DTI (housing only, target under 28%) and back-end DTI (all debts, target under 36-43%). DTI is the single most important number in any loan application — lowering it before applying improves both your approval odds and your interest rate.
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Try calculatorKey takeaways
04 · ideas- DTI = total monthly debt payments ÷ gross monthly income
- Front-end DTI: housing costs only (lenders want <28%)
- Back-end DTI: all debts (lenders want <36–43%)
- Lowering DTI before applying improves rate and approval odds
Debt-to-income (DTI) ratio = monthly debt payments ÷ gross monthly income
If you earn $5,000/month and pay $1,500/month in debt (rent, car, credit cards), your DTI is 30%.
Why it matters: Lenders use DTI to assess how much of your income is already committed. A high DTI suggests you're stretched thin — more default risk. A low DTI suggests room to take on more.
Common thresholds:- Under 36%: Ideal — most lenders approve easily
- 36–43%: Acceptable for most conventional loans
- 43–50%: Harder to qualify; fewer options
- Above 50%: Very difficult to get approved for most products