LTV (Loan-to-Value ratio) is the loan amount relative to the property value, DTI (Debt-to-Income ratio) is the mortgage principal and interest repayment relative to annual income, and DSR (Debt Service Ratio) is the total principal and interest of all loans relative to annual income — the actual loan limit is whichever of the three calculations produces the smallest number. On top of this, with Phase 3 of Stress DSR in effect since July 2025, a stress rate is added to the limit calculation. According to Toss Feed, an additional 1.5 percentage points is added in the metropolitan area and 0.75 percentage points in non-metropolitan areas, so the paper limit has become noticeably smaller than before even with the same income.
What Each of the Three Metrics Measures
LTV (담보인정비율, Loan-to-Value) is collateral-based. It is the loan amount divided by the property value, and per Toss Feed, after the June 27 measures, the ceiling is 70% for the metropolitan area and regulated zones, and 80% for non-metropolitan and non-regulated areas. For a 1 billion KRW property, the collateral-based maximum is up to 700 million KRW (metropolitan area).
DTI (총부채상환비율, Total Debt Repayment Ratio) is the first income-based gate. It adds the principal and interest of the mortgage to only the interest of other loans, then divides by annual income. Applicable rates are around 60% for households without homeownership and first-time buyers, 50% for regulated zones, and 40% for speculative zones.
DSR (총부채원리금상환비율, Debt Service Ratio) is the final income-based gate. It adds up the principal and interest of not just the mortgage but all loans — personal loans, auto installments — and divides by annual income. For total loans exceeding 100 million KRW, the ceiling is 40% at banks and 50% at non-bank institutions. Unlike DTI, which counts only interest for other loans, DSR counts principal as well, so the DSR limit tightens rapidly for people who already have existing loans.
Which of the Three Determines My Limit?
The calculation order is as follows. First derive the collateral-based ceiling from LTV, then derive the income-based ceilings from DTI and DSR separately, then the smallest value is the actual limit. If the property value is high and income is relatively low, DSR becomes the bottleneck; if income is sufficient but the property is in a regulated zone, LTV becomes the constraint. If there are existing personal loans or installments, DSR is almost invariably the final gate — it is the only metric that puts the full principal amount in the numerator.
The differences become clear when put into numbers. Using the Toss Feed example: if a borrower with annual income of 50 million KRW pays 15 million KRW per year in mortgage principal and interest, and 5 million KRW in interest on other loans, DTI = (15M + 5M) ÷ 50M = 40%. But if that same person's "other loan" is a 5-year personal loan, the DSR calculation includes not just the interest but the installment principal repayment — the numerator swells by hundreds of thousands of Korean won, and a limit that passed DTI hits a wall at DSR. This is why the advice to pay off personal loans before looking into mortgage loans comes down to this difference in the numerator. To see all three overlaid in one scenario: for a borrower with annual income of 70 million KRW buying a 1 billion KRW metropolitan apartment, LTV 70% opens up to 700 million KRW, but the Stress DSR limit calculated below comes out in the 400 million KRW range. In this case, the collateral is not the constraint — income is what sets the limit.
LTV is the limit the property allows; DSR is the limit your income allows — the bank lends whichever is smaller.
How Much Does the Stress DSR Cut the Limit?
Stress DSR is a system that pre-factors in the possibility of rising interest rates, calculating the annual principal and interest using a stress rate added on top of the actual loan rate rather than the nominal loan rate. According to Banksalad, from Phase 3 implemented in July 2025, the application scope broadened to all household loans across the entire financial sector including mortgage loans, personal loans, and other loans, and the stress rate added is used only for limit calculation — it is unrelated to the actual interest paid.
Calculating the reduction directly: the assumption is a borrower with no other loans taking a 30-year equal installment mortgage at a nominal rate of 4.0% per year, with the metropolitan area stress addition of 1.5 percentage points applied — limit calculated at 5.5% per year (DSR 40%, bank).
| Annual Income | Limit Before Stress (100M KRW) | After Stress DSR (100M KRW) | Reduction (10,000 KRW) |
|---|---|---|---|
| 50 million KRW | 3.49 | 2.94 | -56,000 |
| 70 million KRW | 4.89 | 4.11 | -78,000 |
| 100 million KRW | 6.98 | 5.87 | -111,000 |
The reduction rate is approximately 16% regardless of income level — when the calculation rate rises by the same proportion, the limit falls by the same proportion. This aligns with Banksalad's simulation of annual income 100 million KRW, 30-year, 4.5% per year (658 million KRW → 556 million KRW, approximately 15% reduction). Why the limit is designed this way, and the background of the calculation rate structure, is covered separately in why loan limits shrink after Stress DSR.
An important caveat is that the stress rate and applicable regions are not fixed values. During the phased implementation process the figures were adjusted multiple times and non-metropolitan application was phased in with delays, so the stress rate and regional classification at the actual time of application must be reconfirmed against the bank's screening criteria.
Checklist Before Applying for a Loan
- Full audit of existing loans — personal loans, revolving credit, installments all go into the DSR numerator. Start by confirming whether total loans exceed 100 million KRW
- Find your bottleneck metric — calculate each of LTV, DTI, and DSR separately and identify which is smallest
- Build your financing plan based on the post-stress limit — the actual limit is the stress-adjusted limit, not the nominal rate limit
- Simulate the effect of extending the loan term — longer term means lower annual principal and interest, which increases the DSR limit
- Reconfirm regulation figures at the time of application — stress rate, regional classification, and LTV ceiling change with each policy announcement