What Is Front-End Ratio?
The percentage of gross monthly income that goes to housing costs (PITI). Lenders typically cap at 28-31%.
Definition
Front-end DTI is just the housing portion of your debt-to-income ratio: PITI divided by gross monthly income. Most lenders prefer this stays under 28%, though they will sometimes go to 31% (FHA) or higher. The 28% rule comes from the classic 28/36 affordability guideline. Combined with your back-end DTI (all debts including housing), it determines how much house you qualify for.
Formula
Front-end ratio = PITI / Gross Monthly Income × 100
Example
Earning $7,000/month with $1,800 PITI: front-end ratio = 25.7%, comfortably under most thresholds.
Use It
Try the Home Affordability CalculatorRelated Terms
DTI (Debt-to-Income Ratio)Your total monthly debt payments divided by gross monthly income, used by lenders to qualify you.PITIThe four components of a typical mortgage payment: Principal, Interest, Taxes, Insurance.LTV (Loan-to-Value Ratio)The loan amount divided by the property's appraised value, expressed as a percentage.