On: How I Used Eve Online to Predict the Great Recession (2013)

[FireBeyond]

That is the usual number given as "responsible". And these days? A reputable bank would not even consider approaching 50, let alone 60, per cent.

[closeparen → FireBeyond]

The metric is DTI (debt to income), and the magic number is 36%. However, this is pretax income, not take home pay.

[dmichulke → closeparen]

Can you tell me why DTI should be <= 36%? Is it a fixed value of some regulation or is there a formula behind it?

[closeparen → dmichulke]

It’s a standard used by mortgage underwriters, presumably based on analysis of decades of past mortgages they’ve written and calibrated to balance their risks and rewards for maximum profit.