Debt-to-Income Ratio (DTI)

Your debt-to-income ratio, or DTI, is the share of your monthly gross income that goes toward paying debts, expressed as a percentage. Lenders calculate it by adding up your monthly debt payments, such as the proposed mortgage, car loans, student loans, and minimum credit card payments, then dividing by your gross monthly income. It is one of the most important numbers in mortgage qualifying because it signals whether you can comfortably take on a new loan. Lower is generally better, and each loan program sets its own limits, which can change over time, so confirm current thresholds with your lender. Lowering your DTI, by paying down debt or increasing income, can improve both your approval odds and the amount you qualify for. Curious how your numbers translate into a price range? Try the affordability calculator.