How much debt is too much for a home equity loan? ... High debt-to-income (DTI) ratio. Most home lenders want to see your debt-to-income (DTI) ratio at 36% or lower.

Generally, longer-term loans have higher interest rates. According to Ken Flaherty, senior manager of retail lending for financial data firm Curinos, as of the second quarter of 2025, average home ...

For example, the debt-to-equity ratio and interest coverage ratios are supplemental ways to see how leveraged a company is. Remember that a high debt-to-assets ratio isn’t necessarily a bad thing.

Third, understand your debt service coverage ratio. Ideally, your operating income should be at least 1.25 times your debt payments to provide adequate cushion for unexpected events.

Investment word of the day: Assessing a company's financial health involves evaluating its debt-to-equity ratio, which compares total debt to shareholder equity. A high ratio indicates reliance on ...

Borrowers typically need at least 15% to 20% equity to qualify, a credit score of 680 and a debt-to-income ratio of 43% or less. ... Pros and cons of using a home equity loan to pay off debt.