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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.
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)
For individuals with a fixed salary, DBR is straightforward:
Example Calculation:
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
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:
DBR=(6000+3000/20000)×100=45%
Since DBR is within 50%, the mortgage is more likely to be approved.
Total Income Considered (AED) | Total Existing Commitments (AED) | Proposed EMI (AED) | DBR (%) | Eligibility |
---|---|---|---|---|
- | - | - | - | - |
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
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.
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