The share of your gross monthly income that goes to debt payments.
Your debt-to-income ratio, or DTI, is total monthly debt payments divided by gross monthly income. Lenders read it as your capacity to take on one more payment.
Front-end DTI counts housing alone. Back-end DTI counts housing plus cards, car loans and student loans. Most conventional mortgage underwriting wants back-end DTI at or below 43%, and the best pricing usually starts below 36%.
Groceries, utilities and subscriptions are not counted — only contractual debt payments.
On a $7,200 monthly gross income, a 43% ceiling means all debt payments together must stay under $3,096 a month.