Hong Kong DSR: repayment calculation and the 50% limit
Calculate Hong Kong mortgage DSR using recognised income and all debt payments. Understand the general 50% limit, suspended stress test and approval caveats.
Published: · Last reviewed: · WeProperty Editorial Team · Editorial policy
Short answer: Debt servicing ratio compares monthly debt payments with income recognised by the lender. The general regulatory ceiling is 50%, not an approval promise. Existing payments still matter, but an existing mortgage alone does not justify applying the old 40% rule.
Scope: the general mortgage measures concern property purchases and refinancing. Property-secured corporate operating credit, mortgage insurance and subsidised-housing schemes require separate conditions.
Use the current framework, not an old stress-test rule
The October 2024 measures removed the extra DSR reduction solely for existing or guaranteed mortgages. Regulatory interest-rate stress testing had been suspended in February 2024. See HKMA: prudential mortgage measures, October 2024 and HKMA: suspension of regulatory stress testing, February 2024.
Calculate both sides of the ratio
DSR = monthly mortgage and other debt payments ÷ lender-recognised monthly income × 100%. Include existing commitments, not just the proposed mortgage. Ask how the bank treats variable earnings, rent, self-employed income and guarantees; money entering an account is not automatically recognised income.
| Illustrative input | Amount / result |
|---|---|
| New mortgage payment | HK$18,000 per month |
| Other debt payments | HK$4,000 per month |
| Recognised income | HK$50,000 per month |
| DSR | HK$22,000 ÷ HK$50,000 = 44% |
| With another HK$6,000 mortgage payment | HK$28,000 ÷ HK$50,000 = 56% |
These are hypothetical editorial examples, not client cases or bank quotations. A result below the general ceiling does not establish eligibility: credit history, income reliability, the property and product conditions still require assessment.
Prepare a complete application checklist
List every debt and its payment schedule. Obtain the lender’s income-document requirements before relying on a borrowing estimate. If you change the deposit or term, compare total interest, early-repayment costs and remaining emergency cash as well as the monthly payment. HKMA: banking and mortgage FAQs.
Use the mortgage calculator for payment scenarios and the affordability calculator for budgeting. Testing higher rates or lower income remains useful personal risk planning; it should not be described as a universally mandatory regulatory stress test.
Questions and answers
Does DSR below 50% guarantee approval?
No. The ceiling is not an offer. The lender still assesses the application and any special scheme conditions.
Does an existing mortgage automatically mean a 40% ceiling?
No. That is not the current general rule, although existing debt payments remain relevant.
Can I simply add a guarantor’s income?
No. Ask the lender to confirm recognised income and how guarantee obligations and other debts are assessed.
Sources
Revision: reviewed the cited scope, replaced outdated generalisations and removed unsupported experience or outcome promises. Examples and checklists are editorial illustrations; they do not establish individual approval or legal rights.