Back-End Ratio

The back-end ratio is another word for debt-to-income ratio(DTI) that represents the portion of the individual's income that goes for payments every month, such as credit card payments, taxes, or mortgage payments. This ratio is used by lenders in conjunction with other factors to approve mortgages. You can easily calculate it through the following formula:

Back-End Ratio = (Total monthly debt expense / Gross monthly income) x 100

Back-End Ratio