What Is the Back-End Ratio in finance

The back-end ratio, also known as the debt-to-income ratio, is a ratio that indicates what portion of a person's monthly income goes toward paying debts. Total monthly debt includes expenses, such as mortgage payments (principal, interest, taxes, and insurance), credit card payments, child support, and other loan payments.

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

Lenders use this ratio in conjunction with the front-end ratio to approve mortgages.