"How much can I borrow?" is the first question when house-hunting or planning big spending in Korea. The rule that sets your limit is DSR (Debt Service Ratio). It sounds technical, but the idea is simple.
You need your monthly payment first to gauge DSR → use the loan calculator for the payment by amount, rate and term.
What is DSR?
Your annual repayments on ALL loans as a share of annual income — mortgage plus credit loans, car installments, card loans, everything.
DSR = (annual principal + interest on all loans ÷ annual income) × 100
The cap is usually 40% at banks, 50% at second-tier lenders. On a ₩50M income, banks lend up to where annual repayments stay under ₩20M (about ₩1.67M/month).
Practical ways to raise your limit
- Lengthen the term — a longer term lowers monthly repayment, lowering DSR and potentially raising your limit.
- Clear existing debt — paying off credit/card loans frees up DSR room.
- Document income fully — higher recognized income means a higher limit.
Know about "stress DSR"
For variable-rate loans, lenders add a stress buffer to your actual rate when assessing DSR, to account for future rate rises. So variable loans can qualify for a somewhat lower limit than fixed.
FAQ
DSR vs. LTV?
LTV is loan-to-value (collateral based); DSR is repayment-to-income (ability based). The tighter of the two sets your real limit.
How does the monthly payment affect my limit?
A bigger monthly payment raises DSR and lowers your limit — so a longer term (smaller payment) can raise it.
Your limit is set by income and repayment, not the price tag. Check the monthly payment in the calculator to gauge DSR before you plan.
This is general information, not a product recommendation or financial advice. Caps and calculations change with policy — confirm with your lender.
