Back-End DTI

Back-end DTI captures every recurring obligation, not just housing, so it is the ratio most mortgage underwriting leans on. The 36 percent target is the second half of the 28/36 rule and signals a budget with breathing room.

Many programs allow more. FHA loans often accept back-end ratios near 43 percent, and conventional loans can stretch into the mid 40s or even around 50 percent for borrowers with strong credit, large reserves, or other compensating factors. Limits vary by lender and loan type. Remember that a qualifying DTI is not the same as a comfortable one, the number that fits underwriting may still leave little for savings and daily life.