Your credit score tells a lender how reliably you pay your bills. Your Debt-to-Income (DTI) ratio tells them whether you can actually afford to take on more debt.
Mortgage underwriters calculate your DTI meticulously. If your ratio is too high, you will be rejected regardless of how perfect your credit score is.
DTI Ratio Calculator
Check your mortgage affordability.
Include credit cards, loans, car finance. Do not include rent/utilities.
What is a good DTI ratio?
Below 36%: Excellent. You have plenty of disposable income. Lenders will view you as low risk.
36% to 43%: Good. Most high street mortgage lenders will approve you in this range, provided your credit score is solid.
44% to 50%: High risk. You will struggle to get a mortgage from a mainstream bank and may be pushed toward specialist lenders with higher interest rates.
Over 50%: Danger zone. More than half your gross income is going to debt. You will almost certainly be rejected for new credit.