Korean DSR Calculator

Enter every loan you currently hold and this calculator gives your debt service ratio, or DSR: the total principal and interest you must repay in a year across all your loans, divided by your annual income. From the income and each loan's balance, rate and remaining term, it shows the annual repayment on each loan and the share of DSR it takes up, and how much room is left, or by how much you are over, against the bank and non-bank limits.

Where the mortgage limit calculator asks "how much can I borrow", this one diagnoses "where do I stand right now". Someone juggling several loans usually wants the current ratio before the limit, and adding one more line shows immediately what a new loan would do to it.

Anyone about to take a mortgage who already has a personal loan, a car loan or an overdraft account. If the collateral is ample and LTV leaves plenty of room but the bank still says the limit is lower than expected, DSR is almost always the reason. Seeing which loan takes the biggest bite tells you what to repay or close first.

It is also a pre-check before borrowing more. You can test what happens to the ratio if you increase a personal loan or change its term, or whether assessing joint income with a spouse creates headroom. If you will be taking a mortgage in a regulated area, switch on the stress rate to get closer to how the bank actually computes it.

DSR limits are applied by lenders under the Financial Services Commission's household debt management measures. The limit is 40% for banks and 50% for non-bank lenders; above those lines, new lending from that sector is blocked. Unlike DTI, which counts the mortgage's principal and interest but only the interest on other loans, DSR adds up principal and interest on everything, including personal loans, jeonse loans and instalment plans, so the same borrower comes out with a far higher ratio.

The calculation starts with each loan's annual repayment. This calculator takes the balance, rate and remaining term, works out the monthly payment on an equal-instalment basis, and multiplies by twelve. The shorter the term, the larger the annual repayment on the same balance, which is why a short-maturity facility such as an overdraft account consumes a great deal of DSR even when the balance is small. The annual repayments are summed and divided by income to give the DSR, and income multiplied by the limit, less total repayments, is the annual repayment room you have left.

The stress rate is an add-on used only in the DSR calculation to anticipate the possibility of rates rising. Mortgages in the capital region and regulated areas carry 3%p, and personal loans carry 1.5%p only when the balance is above ₩100,000,000. The interest you actually pay does not change, but the computed repayment grows and the limit shrinks. Real bank assessments also apply a standard assessment term to personal and jeonse loans rather than the contractual term, so their figure can differ from this one.

Take someone earning ₩60,000,000 a year with a ₩300 million mortgage at 4.5% over 30 years and a ₩50 million personal loan at 6% over 5 years. The mortgage costs about ₩18,240,000 a year in principal and interest, 30.4 points of DSR. The personal loan, at one sixth of the balance but with a much shorter term, costs about ₩11,600,000 a year, 19.3 points. Together that is about ₩29,840,000 a year, and divided by ₩60,000,000 the DSR is 49.7%. That is over the 40% bank limit, so further bank borrowing is unlikely, and only about ₩160,000 a year of room remains under the 50% non-bank limit.

Switch on the 3%p stress rate for the mortgage and its assessment rate becomes 7.5%. The mortgage's annual repayment jumps to about ₩25,170,000, the total to about ₩36,770,000, and the DSR to 61.3%, which is over the non-bank limit as well. The ₩50 million personal loan is below the ₩100,000,000 threshold, so it attracts no stress add-on.

The most common one is entering only the mortgage. DSR counts everything. Personal loans, overdraft accounts, car instalments and card loans all have to go in before the figure resembles what the bank sees. An overdraft account is assessed on the drawn balance rather than the limit, but its short assessment term pushes the ratio up sharply.

The second is mistaking the stress rate for real interest. The add-on exists only for the DSR calculation; the interest you pay is unchanged. The reverse also happens: people leave the stress rate off and are surprised that the bank's limit is lower. For a mortgage in a regulated area, run the figures with it on.

The third is overstating income. Banks accept only documented income, so enter pre-tax salary or declared business income that you can evidence. Finally, being over the limit is not the end of the road. Repaying a short-term loan first, even a small one, or extending a term, reduces annual repayments and brings the ratio down. The per-loan shares show at a glance which loan is worth dealing with.