Many people ask me, “How do I know what my budget should be when I want to buy my first home?” It’s a great question and I have a simple rule to share that I know will help!

I actually have quite a few rules like the “5 second” or the “Never date your BFF’s ex rule”, BUT they won't help you figure out your home budget, unlike Myra’s Golden 40% Rule where your home loan monthly installment should sit below 40% of your net income.

Another method used by banks to check whether you can repay a loan is by calculating your Debt Service Ratio (DSR).

Banks in Malaysia allow a maximum DSR limit of 70%. All of your commitments (not just home loans!) are compared against that limit, and if it sits within the limit, you stand a higher chance of getting your application approved. The lower the % the higher your chances, so try and keep your installments below 60-65% in general!

Phew! Math is tough, but I hope this helped!