---
title: What is a healthy debt-to-asset ratio?
url: https://wealthscout.app/updates/debt-to-asset-ratio
category: Debt
updated: 2026-08-23
---

# What is a healthy debt-to-asset ratio?

Source: https://wealthscout.app/updates/debt-to-asset-ratio

A healthy debt-to-asset ratio is typically under 40%, but the percentage matters less than the type of debt you hold. Good debt funds appreciating assets and builds wealth; bad debt funds consumption and drains your cash flow.

## Takeaways

- A healthy ratio depends heavily on the type of debt you hold, not just the total percentage.
- Good debt makes you money by funding appreciating assets; bad debt requires your income to pay it off.
- A low ratio made of credit cards is far more dangerous than a high ratio made of a fixed-rate mortgage.

**Scope.** Ratios describe exposure, but they do not mean borrowing is affordable. Lenders apply their own serviceability rules, and your personal cash flow matters more than any benchmark.

## Test your debt against financial stress


## Questions

## Sources

- [Net worth calculator](https://moneysmart.gov.au/managing-debt/net-worth-calculator) — Moneysmart
- [Pay off your mortgage faster](https://moneysmart.gov.au/home-loans/pay-off-your-mortgage-faster) — Moneysmart