Debt-to-income ratio: what approved buyers had
The DTI ratios of 2025 home buyers, and why DTI is the top reason for denial.
Updated October 24, 2026
Your debt-to-income ratio (DTI) is your monthly debt payments — including the new mortgage payment, taxes and insurance — divided by gross monthly income. Lenders use it to judge whether you can afford the loan.
DTI of 2025 home buyers
| DTI | Share of purchase loans |
|---|---|
| Under 20% | 3.6% |
| 20–29% | 13.4% |
| 30–35% | 15.3% |
| 36–42% | 25.4% |
| 43–49% | 31.4% |
| 50–60% | 10.2% |
| Over 60% | 0.6% |
42.3% of buyers had a DTI of 43% or more; 10.9% were at 50% or above, usually with FHA or VA loans, larger down payments or strong credit.
Debt-to-income was the most common reason for denial in 2025: 38.9% of denied purchase applications cited debt-to-income ratio first.
Ways to lower your DTI
- Pay off small balances entirely — removing a monthly payment helps more than a partial paydown.
- Add a co-borrower's income (47% of 2025 purchase loans had a co-applicant).
- Choose a less expensive home or a larger down payment to cut the new payment.
Data: FFIEC/CFPB HMDA 2025 public loan/application register; FHFA and HUD 2026 loan limits. Home-purchase figures cover owner-occupied single-family (1–4 unit) site-built homes, first-lien closed-end loans. Methodology