DTI captures the borrower's ability to service debt. Lenders distinguish front-end DTI (housing costs only — mortgage, taxes, insurance) from back-end DTI (all debt obligations including credit cards, car loans, student loans).
US conventional mortgages typically cap back-end DTI at 43%; FHA loans allow up to 50%. Swiss banks apply the 'tragbarkeit' rule: total housing cost (interest at a stressed 5%, amortisation, 1% maintenance) must stay below one-third of gross income — a stricter, stress-tested DTI.
Formula
DTI = Monthly Debt Payments ÷ Gross Monthly Income
Example
A household earning CHF 12,000 gross per month pays CHF 3,500 in mortgage, CHF 600 car loan and CHF 200 in other debt — back-end DTI is 4,300 ÷ 12,000 = 36%.