 TITLE: What Is Debt-to-Income Ratio and How Do I Calculate It? CONTENT: Your debt-to-income ratio, often called DTI, is how much of your gross income goes toward debt payments every month. From a lender's perspective, it shows how much more debt you can reasonably take on given your current income and debt situation.\nThere are two types of DTI that you may run into: front-end and back-end. Front-end DTI represents only your monthly housing costs and how it relates to your gross monthly income, while back-end DTI includes all your monthly debt obligations. Most lenders use back-end DTI only, but mortgage lenders typically use both.\nThe higher your ratio is, the more risk you pose to a lender because it may be more difficult for you to keep up with your payments compared with a low-DTI borrower.\nIf your DTI is relatively high, a lender may charge a higher interest rate to compensate for their added risk. You may even be denied because your DTI is too high. END