DSR, DTI, LTV: Similar Names, Different Math

All three answer "how much can I borrow," but they use different yardsticks. DSR compares all loans’ principal and interest, including credit loans and card loans, against income; DTI was originally designed around mortgages specifically; and LTV sets the limit based on the collateral home’s value, not income at all. In practice, the actual loan ceiling is whichever is smaller between the DSR-based limit and the LTV-based limit, each calculated separately. The 40% figure above applies to banks; non-bank lenders (savings banks, insurers, etc.) currently use a looser 50% cap for borrowers with total loans over 100,000,000 KRW.

Take someone earning 60,000,000 KRW/yr with 6,000,000 KRW in existing annual loan repayments, applying for a new mortgage at 4%/yr over 30 years. The bank DSR cap is 40%, so the annual repayment room available for the new loan is income × DSR cap − existing repayment = 60,000,000 × 40% − 6,000,000 = 18,000,000 KRW. Dividing that into a monthly figure of 1,500,000 KRW and inverting the standard amortization formula gives a DSR-based loan ceiling of roughly 314,191,861 KRW.

If the same borrower puts up a home priced at 500,000,000 KRW as collateral, the default LTV cap (varies by region/regulation; 70% here) gives 500,000,000 × 70% = 350,000,000 KRW as the LTV-based limit. Comparing it against the DSR limit (314,191,861 KRW) computed above, in this case the DSR limit is lower and becomes the actual borrowing ceiling (about 314,191,861 KRW). When existing debt eats into income, DSR often binds first like this; conversely, with high income and little existing debt, LTV can end up the tighter constraint instead.

DTI (Debt-to-Income) compares only the new mortgage’s principal-and-interest plus other loans’ interest against income, so it doesn’t fully capture the principal burden of non-mortgage debt like credit loans or card loans. DSR, introduced later, folds in the principal and interest of every loan and closes that gap. DSR’s arrival did not retire DTI, though — DTI still applies directly to mortgages in regulated areas, capping at 40% in speculation-overheated zones and 50% in adjustment-target zones, alongside DSR and LTV. Your actual limit is the lowest of the three, so when buying in a regulated area, work out DTI as well as DSR.

Stress DSR, at stage 3 since July 1, 2025, doesn’t change the rate you actually pay — it adds a buffer purely for calculating repayment room, to size limits more conservatively. The add-on is not one nationwide figure: under the 2026 first-half policy it is 3.00pp for mortgages in the capital region and regulated areas, 0.75pp for mortgages elsewhere, and 1.50pp for credit and other loans once total credit-loan balances exceed 100 million KRW. The example below uses the capital-region mortgage figure. Even though the contracted rate stays at 4%/yr, the DSR calculation uses 4% + 3.00pp = 7%, shrinking the borrowable principal from about 314,191,861 KRW to roughly 225,461,352 KRW — a drop of about 88,730,509 KRW. The rates are revisited each half-year, so reconfirm with Financial Services Commission notices before applying.

The LTV cap isn’t a single fixed number as in the example above — it’s tiered by whether the area is regulated, how many homes the borrower owns (none/one/multiple), and first-time buyer status. The same home price can carry a relaxed limit for a first-time buyer, while a multi-home owner in a regulated area can face a much lower cap. This guide’s calculation applies the default cap purely as an illustration; confirm the exact LTV cap that applies to you with the lender or current Financial Services Commission notices at the time of application.

To check your own LTV and DSR limits with your actual income, existing debt and target home price, try the mortgage limit calculator. To compare repayment amounts across amortization methods, the loan interest calculator is also useful. The regulatory details in this guide are current as of 2026-07-19; DSR/LTV caps and the stress-rate add-on can change with Financial Services Commission notices, so reconfirm with FSC materials before applying.