Debt-to-Income Ratio

(redirected from Debt to 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 ?
Labour does not support debt to income ratios for first home buyers.
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.
As early as the middle of 2007, the unemployment rate had increased more sharply in counties that had experienced the largest increase in their debt to income ratios from 2002 to 2006.
* Flexibility in underwriting criteria, including such items as debt to income ratios, payment reserves and limited credit histories
The Bank is now pushing ahead with a desire to implement debt to income ratios, but the government has asked for more information.
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.
Household debt to income ratios are the highest they have ever been and wages are stagnant, with more than two-thirds of working people getting less than a 2 per cent pay increase last year.
Mr Wheeler has now done all he can to rein in the housing market, by increasing LVRs and preparing to bring in debt to income ratios. Its over to National to fix the crisis.
Debt to income ratios that would limit the amount a home buyer could borrow to 4.5 times their income would undoubtedly drive many people out of the market.
City Minister Andrea Leadsom confirmed that the FPC will be given new tools to ensure the ongoing stability of Britain s housing market through setting limits on debt to income ratios and loan to value ratios for mortgages.