Debt-to-Income: How Much Can You Borrow?

Before a lender weighs your credit score or your down payment, it asks one blunt question: can you afford this payment on top of what you already owe? The answer is your debt-to-income ratio (DTI), and it quietly sets the ceiling on how much house you can buy.

Two ratios, one that binds

Lenders look at two. The front-end ratio is your housing payment divided by your gross monthly income. The back-end ratio adds all your monthly debts — the new housing payment plus minimum payments on cards, cars, and student loans — over that same income. The back-end is usually the one that binds, because it captures everything you're already committed to.

The 28/36 guideline

The classic rule of thumb is 28/36: keep housing at or under 28% of gross income and total debt at or under 36%. Treat it as a guideline, not a wall — modern automated underwriting (AUS) routinely stretches the back-end into the mid-to-high 40s when the rest of the file is strong: healthy reserves, a high score, or a big down payment. The weaker the file, the closer to 36% they hold you.

What counts — and what doesn't

DTI counts your future PITI (principal, interest, taxes, insurance) plus the minimum monthly payments that show on your credit report. It does not count utilities, groceries, insurance premiums, or taxes withheld — real expenses, but not part of the ratio. And it's measured against gross (pre-tax) income, which is why the number can feel more generous than your take-home budget really is.

How to move it

Three levers: lower your monthly debts (retire a small loan, avoid new financing before closing), raise qualifying income, or put more down so the housing payment itself shrinks. Our affordability calculator does the 28/36 math for you, and a bigger down payment is often the fastest way to pull the ratio back under the line.

By L.W. Martin, Founder — 20 years in the mortgage business, including 15 running his own brokerage. About → · Updated August 2026.