DSR Calculator
Calculate Debt Service Ratio.
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Overview
The DSR (Debt Service Ratio) Calculator computes the ratio of total annual loan repayments to annual income, determining your maximum borrowing capacity. Korea enforces a 40% DSR cap on mortgages, and the Stress DSR system factors in potential rate increases. Use this calculator to accurately assess your loan limits and repayment capacity.
Formula
DSR (%) = (Annual total loan repayments ÷ Annual income) × 100 Annual repayments = Mortgage repayment + Personal loan repayment + Other loan repayments Stress DSR = Current DSR + (Loan balance × Stress rate premium ÷ Annual income) DSR Regulations: - Banks: 40% or below - Non-banks (insurance, savings banks): 50% or below
How to Use
- 1Enter your annual income (pre-tax).
- 2Enter existing loan details: type, balance, rate, and repayment method.
- 3Enter desired new loan amount, rate, and term.
- 4Select whether to apply stress rate testing.
- 5Click calculate to see current DSR, post-loan DSR, and maximum borrowing capacity.
Examples
KRW 50M Income, KRW 300M Mortgage Application
Employee with KRW 50M annual income and no existing loans applying for a KRW 300M mortgage at 4% over 30 years
KRW 50M Income with Existing KRW 50M Personal Loan
Applicant with KRW 50M personal loan (5%) requesting additional KRW 250M mortgage
Background
DSR (Debt Service Ratio) was introduced as Korea's primary lending regulation metric in 2019. It calculates the ratio of total annual principal and interest payments across all loans (mortgage, personal, student, auto) to annual income, with caps of 40% for banks and 50% for non-banks. Since 2024, the Stress DSR system adds a rate premium (0.25-1.5%p) to simulate rate increases, effectively reducing actual borrowing limits. DSR serves as a core policy tool for managing household debt and ensuring financial stability.
Tips
- ✔DSR includes all loans (mortgage, personal, student, auto). Reducing existing debt increases your mortgage capacity.
- ✔Extending the loan term reduces annual repayments and DSR, but increases total interest.
- ✔Stress DSR adds 0.25-1.5%p to the rate scenario, which may reduce your actual limit.
- ✔Personal loans are calculated as 5-7 year amortization regardless of actual maturity for DSR purposes.
- ✔Joint-name borrowing allows income combining, potentially increasing the loan limit.
FAQ
Q. What is the difference between DSR and DTI?
DTI reflects new mortgage P&I and existing loan interest only, while DSR sums all loan principal and interest payments. DSR is the stricter standard and the current primary lending regulation metric in Korea.
Q. With a 40% DSR and 50M KRW salary, what is my loan limit?
With 50M KRW income and no existing loans, the maximum annual repayment is 50M × 40% = 20M KRW. At 4% annual rate over 30 years with equal P&I, this translates to approximately 350M KRW borrowing capacity. Existing loans reduce this proportionally.
Q. What is Stress DSR?
Stress DSR adds a rate premium (0.25-1.5%p) to the current rate to simulate rate increases when calculating DSR. Implemented progressively from 2024, it effectively reduces borrowing limits compared to standard DSR.
Q. How can I lower my DSR?
Repay existing loans, extend loan terms, document additional income, or combine income through joint ownership. Paying off personal loans first is particularly effective for DSR reduction.
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