Debt Service Ratio Calculator
income · repayments · ratio
Compare repayments with income
Adjust income, monthly principal plus interest and your comparison percentage. The gauge shows the ratio and how it compares with your chosen value.
Enter annual income and monthly loan repayments in USD, including cents. The comparison percentage is your own assumption. Results update automatically.
Enter a value.How to use the debt service ratio calculator
Enter annual income, existing and proposed monthly repayments, and a comparison percentage. See the repayment-to-income ratio, remaining monthly headroom and annual excess in US dollars.
This calculator estimates how much annual income is taken up by the principal and interest paid on loans. Enter annual income, the total monthly payment on existing loans and the expected monthly payment on a proposed loan. The model multiplies the two monthly amounts by 12, then divides by annual income. It also compares annual repayments with your chosen percentage and shows any monthly headroom or annual excess. The gauge colour describes that comparison alone. A green result means the estimate is within your chosen comparison, rather than a decision by a lender.
The tool does not determine the amount you may borrow. A lender can assess recognised income, credit history, existing debt, collateral, interest rates, term, product rules and its own affordability policy. Use the estimate to organise repayments before a conversation with the lender. All money fields must use the same currency and income period: annual income with monthly repayments. Use USD amounts directly here; this is a general repayment comparison, not a US mortgage underwriting or legal eligibility check.
When this tool is needed
- Review your current repayment burden before considering a mortgage or personal loan.
- See how a proposed monthly loan payment changes the ratio when added to existing repayments.
- Compare assumptions such as 40% and 50% without treating either as a local legal limit.
Check before calculating
- Check the income period and definition. The annual income you enter may differ from the amount a lender recognises.
- Use monthly payments of borrowed principal plus interest. Include actual debt repayments such as credit advances where relevant; do not add ordinary card spending as though it were loan principal and interest.
- Stress interest rates, loan-term constraints, product exemptions, credit scores and collateral assessments are outside this simple model.
How to use
- Enter annual income in US dollars, including cents if needed. For an income of $60,000, enter 60000. Do not divide the amount by ten thousand.
- Enter the sum of the monthly principal and interest you pay on existing loans.
- Enter the monthly principal and interest expected for the proposed new loan.
- Check that actual repayments of borrowed credit advances are included where relevant, without double-counting ordinary card purchases.
- Open the optional comparison setting and choose a percentage. Read the ratio, remaining monthly headroom and annual excess, or copy the results.
What the ratio measures
The ratio describes annual loan principal and interest as a percentage of annual income. For example, an annual income of $60,000 with $1,000 in existing monthly payments and a proposed $500 payment produces $18,000 of annual repayments and a 30% ratio. At a 40% comparison, the annual comparison amount is $24,000. The remaining $6,000 is $500 per month after the proposed payment has already been included. Headroom is additional repayment capacity under that assumption; it is not a new loan principal amount.
Why the comparison percentage is editable
The default 40% is a comparison assumption you may change. The fixed 40% and 50% markers retain the original South Korean context but are not US approval thresholds. For the same income and payments, a lower comparison percentage reduces headroom and can turn the gauge from green to warning or danger. The colours are relative to your own comparison. Input accepts values above 0 up to 200%; that upper bound is a technical input limit, not a recommendation for an affordable repayment level.
Stress testing and actual loan limits
The Korean Financial Services Commission source dated 2025-05-21 describes a third-stage stress-DSR rollout from 2025-07-01. It is historical Korean policy context. This tool does not add stress interest, model loan terms, apply product-specific debt rules or calculate a lender-approved principal. If you need an actual borrowing limit, obtain a calculation under the relevant lender and current local rules.
Sources and review criteria
The arithmetic uses only your inputs. On 2026-11-01, the linked Korean authority pages were checked for their actual titles, publication years and basic ratio definition: sector-specific introductions in 2018 and a staged policy announcement in 2025. This source review is not a complete review of current lending regulation. The next scheduled source review is 2026-11-20.
Results are simple input-based estimates. Actual approval and borrowing limits depend on lender assessment, current rules, recognised income, debts, collateral and any applicable stress testing.
Calculation basis and sources
- Calculation scope
- Estimate the repayment-to-income ratio, remaining monthly headroom and annual excess from annual income, existing and proposed monthly repayments and a user-set percentage. No stress-rate engine, product-specific adjustment, income recognition or automatic debt lookup is included.
- Calculation method
- Ratio = annual principal and interest ÷ annual income × 100. Annual repayments are the sum of existing and proposed monthly payments multiplied by 12. Ordinary card spending is not automatically treated as debt repayments.
- Limits and disclaimer
- A reference estimate without a guarantee of approval, borrowing limit or contract terms. The lender and current applicable rules determine recognised income and debts, stress testing and final lending decisions.
- Personal information processing
- Input values are calculated only in the current browser and are not sent to a server or stored.
🗓️ Source and copy review 2026-11-01 · 🔁 Next review 2026-11-20
FAQ
How is the repayment-to-income ratio calculated?
Add the existing and proposed monthly principal-plus-interest payments, multiply by 12, divide by annual income and multiply by 100. With annual income of $60,000 and monthly payments of $1,000 plus $500, annual repayments are $18,000 and the ratio is 30%. All amounts must use USD.
Does a result within the comparison guarantee a loan?
No. The editable percentage is your own comparison assumption. The 40% and 50% markers are retained South Korean examples, not US legal thresholds. Lenders assess recognised income, debt, credit, collateral, product terms and other criteria separately. Remaining monthly headroom already subtracts the proposed payment; it is not an approved loan amount.
Where should borrowed card advances be entered?
Include actual monthly principal-plus-interest repayments of borrowed credit advances in existing monthly repayments where applicable. Ordinary card purchases are not automatically loan repayments. Confirm which debts and repayment method a lender will recognise for its own assessment.
Does the calculator include stress interest testing?
No. It does not add a stress rate, restrict loan terms or apply product-specific rules. Changing the comparison percentage explores a different assumption while keeping the same entered payments. For an actual loan limit, ask the lender for a calculation under current applicable rules.
Are my income and loan details saved?
No. The Toolvil calculator calculates only in the current browser and does not send the values you enter to a server or store them. If you refresh, the values you entered disappear.