How will your DSR affect your home loan amount?

Buying an expensive item like a house or real estate is always a daunting journey. Whether this is your first experience or not, one question remains: can I afford to buy this place?

Unless you can afford to finance your home purchase yourself, most would seek a home loan from banks to help with their financial payment.

Here are the factors banks consider when determining how much loan you can get:

In this article, we will dig deeper into what DSR is and how it works.

Debt service ratio

Debt Service Ratio or DSR is a method banks use to determine if you can afford to repay the loan you are requesting. To measure whether you can afford the loan, the DSR takes into consideration the amount of commitment you have relative to your income.

DSR = Engagement / Revenue

By calculating your DSR, banks will be able to assess your monthly commitment and see how your financial situation compares to your financial limits. However, depending on the bank, different banks may have different ways of calculating income or liability. For example, some banks will look at net income while others will look at gross income. Therefore, you will need to do your homework on this to identify which bank will be able to give you the best rate.

In addition, banks will also have their threshold in terms of DSR qualified for loan application. Apart from your income level, the bank will also take into account your net worth, age, and qualifications to determine how much loan you can get.

Now, finding the right loan that could meet your financial appetite can take some time due to the variety of options available. To save time, head over to EdgeProp’s LoanReport tool to view your custom loan packages from different banks. Check your eligibility at

Get the latest news @

Subscribe to our Telegram channel for the latest stories and updates

Click here for more property stories

Comments are closed.