What debt-to-income ratio do mortgage lenders allow?

Lenders look at two debt-to-income (DTI) ratios. The front-end ratio is your projected housing payment (principal, interest, taxes, insurance, HOA) divided by gross monthly income — many lenders prefer this under about 28%. The back-end ratio adds all other monthly debt payments — car loans, student loans, credit card minimums — and is the one that matters most; it typically tops out around 43%, though conventional loans can stretch to 45%–50% with strong compensating factors, and FHA sometimes allows higher. Lower is better: a DTI under 36% gives you the most options and best pricing. To improve yours, pay down or pay off small debts before applying, since eliminating a payment can lower your back-end ratio meaningfully. Note lenders count the minimum payment, not your full balance. Estimate where you stand at wealthserene.com/tools/home-affordability.