How it is calculated
- Maximum instalment = income × DSR limit − monthly commitments
- Maximum loan = instalment × (1 − (1 + r)^−n) ÷ r, where r is the annual rate ÷ 12 and n is the number of months (at a 0% rate, loan = instalment × n)
- Maximum price = maximum loan ÷ (1 − down payment %)
If the maximum instalment is zero or negative, there is no room for a new loan.
Worked example
Net income RM6,000, commitments RM800, DSR limit 60%, rate 4%, 35 years, 10% down payment:
- Maximum instalment: RM6,000 × 60% − RM800 = RM2,800
- Maximum loan: RM632,375.73
- Maximum price: RM632,375.73 ÷ 0.9 = RM702,639.70
If income were only RM1,000, the maximum instalment would be negative and the calculator shows that there is no room.
Why your number may differ
Each bank sets its own DSR limit and counts income and commitments in its own way.