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10-year TreasuryYield · Oct 29, 20264.980%
Rates as of Oct 29, 2026Dated references, not live quotes. 15-year/FHA/VA modeled; FHA/VA APR is not all-in.
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Mortgage glossary

Debt-to-income ratio (DTI)

Debt-to-income ratio, or DTI, compares monthly debt obligations with the monthly income the lender accepts for qualification. It is usually expressed as a percentage. The calculation includes the proposed housing payment and other counted debts. It helps evaluate repayment capacity, but it does not describe every expense in your household budget.

Nick’s Lending Published September 21, 2026
A couple reviewing household finances
A couple reviewing household finances. AI-generated illustrative image; not actual clients or a named property.

What does debt-to-income ratio measure?

Debt-to-income ratio, or DTI, compares monthly debt obligations with the monthly income the lender accepts for qualification. It is usually expressed as a percentage. The calculation includes the proposed housing payment and other counted debts. It helps evaluate repayment capacity, but it does not describe every expense in your household budget.

A hypothetical DTI calculation

Suppose accepted gross monthly income is $8,000, the proposed qualifying housing payment is $2,400, and other counted monthly debts total $800. The calculation is $3,200 ÷ $8,000 = 40%. These are invented educational figures, not an approval threshold or a statement that this payment would fit your life.

Why the lender’s number may differ

Gross income is generally income before taxes and deductions, not take-home pay. Qualifying income can differ from deposits or a recent paycheck. Student loans, revolving accounts and other obligations have program-specific treatment. There is no single DTI limit that establishes eligibility for every mortgage.

Bring the calculation back to your budget

Ask which income and debts were included, and confirm that the housing payment accounts for applicable taxes, insurance and association charges. Then compare the result with your actual take-home budget, including food, utilities, transportation, care costs and savings. A qualifying result and a comfortable payment are separate questions.

Sources and further reading

Mortgage glossary

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Mortgage glossary

Combined loan-to-value ratio (CLTV)

Loan-to-value ratio (LTV)

Prepaid mortgage expenses

Mortgage reserves

Rate context & assumptions

Dated rate references, not a live quote. Check the rates-as-of date shown with the figures. Review the product-specific assumptions below.

Dated references, not live quotes. 15-year/FHA/VA modeled; FHA/VA APR is not all-in.

30-year fixed

Rate 7.161% · APR 7.232%

* Conventional 30-year fixed-rate purchase loan. $650,000 purchase price. $455,000 loan amount. $195,000 down payment (30%). 70% LTV. 780 representative credit score. Owner-occupied single-family residence in California. 360 monthly payments. 30-day rate-lock period.

Pricing shown at par: 0.000 discount points and $0 lender credit. Estimated principal-and-interest payment is $3,076.48 per month. Payment does not include property taxes, homeowners insurance, HOA dues, assessments, or other property-related charges. The actual total monthly payment will be higher. Mortgage insurance is not included because this example assumes 70% LTV.

The illustrative APR assumes $3,200 in prepaid finance charges and an amount financed of $451,800. Actual APR and closing costs depend on the final loan terms and which charges constitute finance charges under applicable law. Rate, APR, fees, and availability are subject to change until locked. All loans are subject to credit, income, asset, property, appraisal, underwriting, and program requirements.

Example as of October 29, 2026 at 6:35 AM Pacific. This is not an approval, offer, guarantee, or commitment to lend.

15-year fixed

Rate 6.411% · APR 6.523%

15-year fixed temporary estimate as of 2026-10-29: 0.750 percentage points below the 30-year conventional reference. Not independently sourced lender pricing.

Illustrative purchase: $650,000 price, $455,000 loan, $195,000 down (30%), 70% LTV, 780 credit score. Owner-occupied California single-family residence; 180 monthly payments; 30-day lock assumption.

At 0.000 points and $0 lender credit, estimated principal and interest is $3,941.31/month. Taxes, insurance, HOA and other property charges are excluded; total payment will be higher.

Modeled APR uses $3,200 prepaid finance charges and $451,800 amount financed over 180 months. This is an estimate, not an offer or commitment. Actual rates, APR and eligibility require individual review.

FHA · 30-year fixed

Rate 6.991% · Modeled APR 7.061%

FHA 30-year modeled market reference from the morning email dated 2026-10-29. Not a lender quote.

The email applies a shared illustrative APR model. It does not supply a complete program-specific borrower scenario.

Program-specific mortgage insurance and funding fees are not established by this model. This is not an all-in FHA or VA APR quote.

Ask for a personalized rate, APR, payment and program-specific costs before making a borrowing decision.

VA · 30-year fixed

Rate 6.839% · Modeled APR 6.908%

VA 30-year modeled market reference from the morning email dated 2026-10-29. Not a lender quote.

The email applies a shared illustrative APR model. It does not supply a complete program-specific borrower scenario.

Program-specific mortgage insurance and funding fees are not established by this model. This is not an all-in FHA or VA APR quote.

Ask for a personalized rate, APR, payment and program-specific costs before making a borrowing decision.

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10-year Treasury · Yield · Oct 29, 2026 · 4.980%