Debt-to-Income Ratio

(redirected from Debt-Income Ratios)

Debt-to-Income Ratio

The amount of an individual or company's gross income that it spends on debt service as a percentage of its total gross income. The higher the DTI is, the less likely it is that the individual or company will be able to repay debt. As a result, financial institutions use the DTI in informing decisions on whether or not to make loans. Often, the "debt" in the term refers to all liability payments (such as employee wages, taxes, and utility bills) and not simply to debt.
References in periodicals archive ?
Although household debt-income ratios remain high, debt-service burdens have fallen appreciably, partly reflecting the refinancing of mortgages at lower interest rates.
In all leading OECD economies savings ratios were falling and debt-income ratios rising as people were encouraged to borrow more in order to spend more.