Debt-to-Income Ratio (DTI)
Your total monthly debt payments divided by your gross monthly income, used by lenders to assess borrowing capacity.
What does debt-to-income ratio mean?
Lenders generally want total DTI at or below 36–43%, with housing alone under 28%. A lower DTI improves both your approval odds and the rate you’re offered.
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Related terms
Debt-to-Income Ratio — frequently asked
What debt-to-income ratio do mortgage lenders want?
Most lenders like a total DTI of 36% or less, though many programs allow up to 43%, and some FHA loans stretch higher with strong credit. A lower DTI improves both your approval odds and the rate you are offered.
How do I lower my debt-to-income ratio?
Either reduce monthly debt or raise qualifying income. Paying off a car loan or a card, avoiding new debt before applying, and refinancing to a longer term all cut the monthly obligations that go into the ratio.