Debt-to-income ratio (DTI) measures how much of your gross monthly income is committed to debt payments.
Formula
DTI = (Monthly debt payments ÷ Gross monthly income) × 100
Typical Thresholds
| DTI | Interpretation |
|---|---|
| < 20% | Strong flexibility |
| 20%–36% | Generally manageable |
| 37%–43% | Elevated risk |
| > 43% | Often difficult for mortgage approval |
Why It Matters for Relocation
High debt load can make a nominally affordable city feel tight, especially if rent is also rising. DTI should be considered alongside rent-to-income and tax burden.
Actionable Tip
Before moving, model post-move DTI with expected rent, transportation costs, and any student loan obligations.