Glossary
Debt Service Ratio (DSR)
Debt Service Ratio (DSR) compares monthly debt commitments with the income measure accepted by a lender. The formula, accepted income and approval limit vary by lender and applicant.
In Detail
A simple illustration divides total monthly debt commitments by the income measure used by the lender, but lenders may treat variable, overseas or rental income differently. Ask for the calculation inputs and approved facility in writing; do not assume projected rent will be accepted.
Investment Impact
DSR can constrain the approved amount, but it should not be managed through unsupported rental forecasts. Compare affordability under the lender's actual inputs and keep an emergency buffer outside the deposit.
Frequently Asked Questions
Do all banks count rental income in DSR calculations?
No. Rental-income treatment is lender- and evidence-specific. Ask what lease or income evidence is required and what amount the lender accepts.
What happens if my DSR exceeds 70%?
The lender may reduce or decline the facility. Ask for the calculation and consider a lower purchase price or debt reduction; any joint application or tenure change remains subject to lender approval.