Debt-to-Income Ratio

Debt-to-income ratio is the share of gross monthly income that goes to debt payments, such as car loans, student loans, credit cards and housing. Mortgage lenders rely on it to decide how much a borrower can carry.

The 3x rent rule is a simpler cousin. It looks only at rent against income and ignores other debts. Two applicants earning $4,500 a month both pass on a $1,500 apartment, even if one of them also pays $900 a month toward loans.

That gap is why some landlords read the credit report alongside the income test, and why passing 3x does not prove the rent is affordable for you. Add your debt payments to the rent and compare the total with your pay before you sign.