# Debt-to-income ratio

> Your monthly debt payments, including the new mortgage, divided by your monthly income before tax. Lenders use it to decide how much you can borrow. Often shortened to DTI.

By David Knorr, founder of BuyWise Home. Last reviewed October 28, 2026. Web page: https://www.buywisehome.com/guide/glossary/debt-to-income

## Why it matters to you

A lower ratio gives you more loan options. Paying down a car loan or a card balance before you apply can help.

> Example: Income of $6,000 a month. A $2,100 mortgage payment, a $300 car payment and $150 on cards add up to $2,550, or 42.5% of your income.

## Related

- [Step 1: Am I ready to buy?](https://www.buywisehome.com/guide/ready-to-buy)
- [Pre-approval](https://www.buywisehome.com/guide/glossary/pre-approval): A lender's written estimate of what it will lend you, after checking your finances.
- [Down payment](https://www.buywisehome.com/guide/glossary/down-payment): The part of the price you pay in cash. The loan covers the rest.

_General information based on the standard Georgia REALTORS® purchase contract and public guidance. Your own contract decides: read it, and ask your agent or closing attorney about anything that matters. Not legal or financial advice._