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Buyer's Guide • July 17, 2026

What is debt-to-income ratio?

by Matthew Tanzer

Debt-to-income ratio (DTI) measures your monthly debt relative to income. Lenders use it to determine how much you can borrow.

How is it calculated?

Monthly debts divided by gross monthly income.

What is acceptable?

Often up to 43%–50%, depending on the loan.

What counts as debt?

Loans, credit cards, and the new housing payment.

Can I reduce it?

Yes, by paying down debt or increasing income.

Why does it matter?

It affects approval and loan size.

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