Debt-to-income ratio (DTI) is a measure of your monthly debt obligations relative to your gross monthly income, expressed as a percentage. Lenders use DTI to assess your ability to take on additional debt, particularly for mortgage applications. It's calculated by dividing total monthly debt payments (including the proposed new mortgage) by gross monthly income. Most conventional lenders prefer a DTI below 43%, though some programs allow higher. Front-end DTI looks only at housing costs (ideally under 28%), while back-end DTI includes all monthly debts.