I'm currently looking forward to invest in commercial / another residential property but unsure how the DSR being calculated. Currently, I still got one house in loan but that being taken care by tenant rental. Let say, I have pay out all my car loans. The only commitment are daily grocery & childcare.

I know that the formula is (Total Commitment / Total Net Earning) * 100% but unsure how it works from bank perspective.

Can someone share some experience here on how this is being calculated? Thanks.

Your rental if not stamp DON'T COUNT, if not declare in income tax return DON'T COUNT.
Any EPP (Easy Payment Plan) COUNT FULL
All credit card total limit 5% COUNT (some bank don't count)
Study Loan (some bank count, most turn blind eye)
Car loan COUNT

if the score fall below 0.6 it should be fine ...

which means what ever you need to pay, need to be below 60% of your net salary.

May i know how this count?
All credit card total limit 5% COUNT (some bank don't count)

For example, If i have 3 credit card with total credit limit of 45,000 + 40,000 + 35,000 = 120,000 * 5% = 6,000 being deducted from monthly nett income? That would be ridiculous!

that is your potential exposure if you maxed out those card ... they will take your payment and spending history into consideration.

if you previously spend 10K monthly then 5% will be loaded to your DSR, regardless if you have been making full payment.

What about our daily grocery / petrol / children school fees / broadband & mobile?

your nett income x 70% = That the maximum commitment you can have..

if you got other commitment then deduct from the above answer.. but some back calculate commission and OT differently

Oic... if let's say if averagely i spent RM 10k/mth, it's only 500 being deducted. I don't spend that much monthly since not rich ppl, so would be very marginal effect. Scared me to hell that i am preparing to cancel few of my credit card! LOL! thanks for this insight.

Do you have your tenancy agreement legalized (stamp at IRB) and declare your rental in income tax? That can help you to quantify additional income

Usual rule is 70%, but still subject to bank approval. If only earn 1k permonth, i think 50% pun susah.
If you are earning >100k perannum, some bank might consider giving up till 80% (not all la, some can negotiate one)
Working in MNC even have more plus point, meaning having stable income.
Also having >100k FD, bond or mutual fund also plus point as those have potential to earn more income (maybe estimate a conservative 5% return perannum)

good luck.

Too bad, I didn't stamp it at that point of time. If wanted to stamp now then might hit the penalty.

The problem with this DSR is like the scenario below:-

1st Example
- Earn 5K
- Commitment 2.5K

2nd Example
- Earn 10K
- Commitment 6K

Although the second example having higher DSR, he or she having more capability compare to the first example.

All these bank won't count as commitment ya. Bank will count all bank transaction that will show in ccris report. Such as personal loan, car loan, credit card outstanding, balance transfer, house loan etc

With regards to the rental income, no stamping on the tenancy agreement doesn't mean that it can't be taken as income source. Produce evidence of consistent rental collections eg bank statement and the bank will consider about it.

ni macam boleh fake the rental bro.. say i have another house bought under my name for my parents, every month i bank in rm1000 den middle of the month i withdraw rm500, end of the month another rm500, next month i bank in rm1000 again.. looks like rental income quite consistent

or say i actually rent out rm1000, tenant bank in account A, but i show bank my account B which i sendiri constantly bank in rm2500 everymonth..

This post has been edited by twincharger07: May 9 2015, 11:35 AM

Noted the possibility of the fraudulent act but the banks do consider about it so long as the borrower can show valid evidence and reasonable explanation. The tenancy agreement even though not stamped is still a binding contract, just that it is not admissible to court. On one extreme, stamped tenancy doesn't mean that there are rental receipt as the tenant could have delayed / stop paying or terminated the contract unilaterally.

seems banyak loophole.. no wonder every TDC can borrow $$

Thanks for the feedback. I think I will go to the bank branch and straight away ask them how much I can borrow from them. Let see whether any TDH can borrow from them.