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What Is Debt-to-Income (DTI) and Why Lenders Care
2025-09-17
DTI helps lenders assess your ability to repay—lower ratios are generally better.
Formula
DTI = Total monthly debt payments ÷ Gross monthly income.
Typical thresholds
Conventional loans often prefer DTI ≤ 36%–45% (varies by lender and program).
Improve your DTI
Reduce debt payments, increase income, or extend terms (with caution).
| DTI Range | Interpretation |
|---|---|
| <= 36% | Generally good |
| 36%–45% | Borderline, varies by lender |
| > 45% | Often ineligible or requires compensating factors |
Try it now: DTI Calculator and Loan Calculator.
Disclaimer: These tools provide estimates only and are not financial advice.