Definition
Debt-to-Income Ratio (DTI)
The share of your monthly income that goes toward debt payments.
Your debt-to-income ratio compares your total monthly debt payments to your gross monthly income, shown as a percentage. If you pay $1,500 in debt on $5,000 of income, your DTI is 30 percent.
Lenders use DTI to decide how much you can borrow, especially for mortgages. A lower DTI signals you have room in your budget and makes you a safer borrower.