Debt-to-income (DTI) ratio is your total monthly debt payments divided by your gross monthly income. Mortgage lenders use it to assess whether you can afford a new loan. Front-end DTI counts only housing costs (PITI: principal, interest, taxes, insurance) and should stay under 28%. Back-end DTI counts all debt payments (housing + car + student loans + credit cards minimums) and should stay under 36% for conventional loans, with FHA loans allowing up to 43%. If your DTI is too high, you have two levers: pay down debt or earn more income. Refinancing existing debt to longer terms also lowers monthly DTI.
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Debt-to-Income Ratio
August 22, 2026 · Aditya Gupta
Personal Finance
Related terms
1099 Form
Form 1099 is a family of IRS forms reporting various types of non-W-2 income. 1099-NEC reports nonemployee compensation…
529 Plan
A 529 plan is a tax-advantaged education savings account. Contributions grow tax-free; withdrawals for qualified education expenses (tuition,…
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Annual Percentage Yield (APY) is the effective annual rate of return on a savings or investment product, accounting…
