Want to know your ability when to buy a house?

DSR or Debt-Service-Ratio.

• The main method used by the bank to determine the maximum loan that can be made by someone.
• These limits vary by bank, each bank will offer different DSR limits based on salary per individual.
• It is good as a loan applicant, you calculate your DSR in advance to avoid you do things in vain.

DSR formula is to calculate on how much the money that the bank could lend you and the house price that you can afford.

There are 3 types of formula that can be used to calculate on how much of the price house you could afford. 

1. Formula 3 times of household income.

Formula;

Household income X 12 months X 3 = house price you can afford.

Example;

RM5,500 X 12 X 3 = RM198,000

The disadvantage of the above formula is it has not been deducted with any other commitments such as car loans, fuel in a month, savings and so on.

2. 30% formula.

30% formula is a formula where ideally you cannot spend more than 30% of household income. But this matter is a subject to their needs, but the best is to restrict all other expenses to 30% of household income.

Formula;

Household income X 30% = house expenditure.

3. The balance of income.

The remaining income after you pay all your needs can be more appropriate benchmark to know how much a house you can actually afford. This is because after paying all the requirements, debts and so on, you can clearly see how much money is left.

Formula;

Household income – all expenditure = house price you could afford.

Please note, the material available is general information only, and is subject to change without notice. The information held within this website should not be relied on as a substitute for legal, financial, real estate or other expert advice. Elelong Services disclaims all liability, responsibility and negligence for direct and indirect loss or damage suffered by any person arising from the use of information presented on this website or material that arises from it.