Home › Articles › How much home loan can you get?
How Much Home Loan Can You Get? Understanding DSR (2026)
When you apply for a home loan in Malaysia, the bank does not simply look at your salary. The single most important number in the approval is your Debt Service Ratio (DSR) — the share of your income already swallowed by monthly debt commitments. Understand DSR and you can estimate your maximum loan before you ever step into a branch.
What is DSR?
DSR is the percentage of your income that goes towards paying all your monthly debt obligations, including the new home loan instalment you are applying for. The formula is:
DSR = (Total monthly debt commitments ÷ Net monthly income) × 100%
Most Malaysian banks approve loans up to a DSR of around 60%–70%, and some stretch to 80% for higher-income borrowers with a strong profile. The exact cap and whether they use net or gross income varies by bank.
What counts as a monthly commitment?
Banks add up every recurring debt repayment on your record via CCRIS/CTOS, not just the obvious ones:
- Existing car / hire-purchase loan instalment
- Personal loans and ASB/share-financing repayments
- PTPTN and other education loans
- Credit cards — usually counted as 5% of your outstanding balance or limit
- Other home loans you already service
- The new home loan instalment you are applying for
A worked ringgit example
Say your net income is RM6,000 a month and your bank caps DSR at 70%:
| Step | Working | Amount |
|---|---|---|
| Maximum total debt allowed | 70% × RM6,000 | RM4,200 |
| Less: existing car loan | − | RM800 |
| Less: credit card (5% of balance) | − | RM250 |
| Available for home loan instalment | = | RM3,150 |
An instalment of about RM3,150 a month, at a typical 4% rate over 35 years, supports a home loan of roughly RM710,000. Reduce your other commitments — pay off that credit card or finish the car loan — and your borrowing headroom rises immediately.
How to increase how much you can borrow
- Clear small debts first. Settling a credit card or personal loan frees up DSR pound-for-pound.
- Apply jointly. A joint application with a spouse or family member combines both incomes.
- Lengthen the tenure. Up to 35 years (or until age 70) lowers the monthly instalment, though you pay more total interest.
- Declare all income. Documented bonuses, commissions and rental can lift the income the bank uses.
Frequently asked questions
What is a good DSR in Malaysia?
Below 60% is comfortable and improves your approval odds. Between 60% and 70% is usually still acceptable. Above 70%–80% and many banks will decline or ask you to reduce commitments first.
Does DSR use gross or net income?
It depends on the bank. Conservative lenders use net income after statutory deductions; others use gross. Because this changes your result significantly, ask each bank directly.
Can I get a loan if my DSR is too high?
You can improve it by paying down existing debts, applying jointly, or choosing a longer tenure to lower the monthly instalment. Reducing the loan amount (a bigger down payment) also helps.
Estimate your maximum loan with the Mortgage Affordability Calculator →This article is general information only, not financial advice. Figures are estimates and every bank assesses DSR differently — always confirm with your lender. See our full Disclaimer.