What is Debt Burden Ratio (DBR)?
If you're considering a mortgage in the UAE, you've likely come across the term Debt Burden Ratio (DBR). This is one of the most important factors that banks and financial institutions use to assess your ability to repay a loan.
According to the Central Bank of the UAE, the maximum allowed DBR is 50% of your gross monthly income, including salary and other verifiable income sources.
However, banks do not automatically approve loans at the maximum DBR and may apply stricter limits based on your individual financial circumstances.
How is DBR Calculated?
The formula for DBR is:
DBR=Total Monthly Debt Payments/Gross Monthly Income×100
This includes:
✅ Existing loan payments (personal loans, car loans, credit card payments)
✅ New mortgage loan installment(proposed)
✅ Any other fixed debt obligations
✅ A portion of your total credit card limit (2.5% to 5% of the limit)
✅ A percentage of your average commission or bonus (50%-60% of the last 6-12 months' earnings)
DBR Calculation for Fixed Salary Earners
For individuals with a fixed salary, DBR is straightforward:
Example Calculation:
- Gross Monthly Salary: AED 20,000
- Car Loan EMI: AED 3,500
- Expected Mortgage EMI: AED 5,000
- Total Credit Card Limit: AED 50,000 (5% assumed monthly repayment = AED 2,500)
DBR=(3500+5000+2500/20000)×100=55%
Since this exceeds the 50% limit, the mortgage may not be approved as applied, so you may have to reduce the loan amount to fit within the 50% DBR
DBR Calculation for Commission-Based or Variable Income Earners
If you earn a variable income from commissions or bonuses, banks will typically use 50% to 60% of your average earnings over the past 6-12 months.
Example Calculation:
- Fixed Salary: AED 15,000
- Average Commission (Last 12 Months): AED 10,000
- Bank Applies 50% of Variable Income = AED 5,000
- Total Eligible Income: AED 15,000 + AED 5,000 = AED 20,000
- Expected Mortgage EMI: AED 5,000
- Credit Card Limit: AED 60,000 (5% assumed monthly repayment = AED 3,000)
DBR=(6000+3000/20000)×100=45%
Since DBR is within 50%, the mortgage is more likely to be approved.
Why is DBR Important for Mortgage Applicants?
- Regulatory Requirement – UAE banks cannot approve a mortgage if your DBR exceeds 50%.
- Stress Testing – Banks test your loan at 2-4% higher than the current mortgage rate to assess if you can handle future interest rate hikes.
- Investment Property Rule – If buying for investment, two months’ rent deduction is applied in DBR calculations.
- Retirement Planning – If the loan extends beyond retirement, banks ensure your post-retirement income can cover DBR at 50%.
For a comprehensive mortgage affordability check, visit our Mortgage Calculator.
Disclaimer: This calculator provides an estimate based on the inputs provided and should not be considered financial advice or as an approval. Mortgage eligibility and approval are subject to bank policies and financial institution criteria. Please consult a Morttgage broker or a professional financial advisor for personalized guidance
Final Thoughts
Your Debt Burden Ratio (DBR) plays a major role in your ability to secure a mortgage in the UAE. If you’re close to or exceeding the 50% DBR threshold, consider reducing your existing liabilities or increasing your income eligibility.
👉 Next Steps:
- Use the DBR calculator above to check your eligibility.
- Visit our Mortgage Calculator to get a full financial picture.
- Consult a financial advisor to explore options that fit your DBR and future financial goals.
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