From the view of the national economy, a better indicator may be the total debt to income ratio
per person in which debt includes their mortgage payment.
The key variable of interest in our study is the increase in the debt to income ratio
across counties from 2002 to 2006.
b) Cindy's debt to income ratio
is less than 10%; this illustrates that Cindy's financial leverage is better than average financial leverage if an emergency should arise.
It should be noted that although the mortgage debt to income ratio
increased just 7 percentage points for households earning less than $25,000, compared with 10 percentage points to 11 percentage points for households earning $25,000 to $100,000, homeownership rates are much lower among this segment of the population.
Rising economic pressures continued to increase consumers' debt to income ratios
during the review period.
Finally, CFSI said the fourth group, the Financially At Risk, also had unhealthily high debt to income ratios
(48%), and 62% said they would only be able to make ends meet for a month or less in the case of a sudden loss in income.
With the new powers the FPC will be given tools to set limits on debt to income ratios
and loan to value ratios for mortgages.
* Flexibility in underwriting criteria, including such items as debt to income ratios
, payment reserves and limited credit histories
The report also explores various indicators on the financial health of South African consumers themselves, including repeat borrowing activity, debt to income ratios
and instalment to income ratios.