Easy Financial Calculators » Mortgage Terms » Debt-to-Income ratio

Debt-to-Income Ratio

A debit-to-income ratio, abbreviated as DTI, is the percentage of an individual's monthly gross income that goes toward paying debts. In the United States, conventional financing limits are typically 28/36 for manually underwritten loans. This means 28% of an individual's monthly gross income would be the qualifying limit for housing expense and 36% of an individual's monthly gross income would be the qualifying limit for housing expense plus recurring debt.

See the example below:

• A yearly income of $72,000 translates into a monthly gross income of $6,000
• $6,000 x .28 = $1,680 allowed for housing expenses
• $6,000 x .36 = $2,160 allowed for housing expenses plus recurring debt.

Using your own yearly income and recurring debt you have, use our mortgage calculator to help determine what size loan is best for you. A qualified home mortgage consultant or broker can also aid in this process.

Learn more helpful Mortgage Terms to assist your home buying process.