Definitions for "Debt Servicing Ratio"
A measure of the borrower's capacity to repay a loan. A lender generally calculates the Debt Servicing Ratio by taking into account a borrower's expenses as a proportion of the borrower's income.
Net interest income on foreign debt expressed as a percentage of exports of goods and services.
The Debt Servicing Ratio measures how easily you can afford the mortgage payments. It is the percentage of the persons income available to service debt. The DSR is calculated in different ways by different lenders. However, the principle is the same: they merely apply different percentages. The equation is loan payments divided by eligible income. Lenders generally allow 30% to 35% of your own income and 80% of your rental income to be eligible income applied to loan payments.