man placing a heavy rock on a see-saw with a bag of money on the opposite side


When it comes to securing a mortgage, lenders assess various financial metrics to determine an applicant’s creditworthiness, eligibility and the terms of the loan. One of the most critical factors considered is the Debt Burden Ratio (DBR). Understanding how DBR impacts mortgage application approval is essential for prospective homebuyers. In this blog, we’ll delve into the significance of DBR and its implications on the mortgage approval process.

What is Debt Burden Ratio (DBR)?

Debt Burden Ratio, also known as the Debt-to-Income (DTI) ratio is a financial metric that compares your total monthly debt payments to your gross monthly income.. It’s calculated by dividing the total monthly debt payments by the gross monthly income and is typically expressed as a percentage. It provides lenders with insights into your ability to manage additional debt obligations, such as a mortgage payment, based on your income and existing financial commitments

How Does DBR Affect Your Mortgage Application?
      • Mortgage Eligibility: Lenders use DBR to assess your ability to afford a mortgage payment relative to your income. Typically, lenders look for a DBR below a certain threshold and prefer a low DBR. In the case of the UAE, the maximum DBR allowed is 50 %. A lower ratio indicates that you have more disposable income available to cover your mortgage payment, making you a more favorable candidate for loan approval.

      • Loan Approval: Your Debt Burden ratio plays a significant role in determining whether you qualify for a mortgage and the maximum loan amount you can borrow. Lenders have limits set for different loan programs, and exceeding these limits results in loan denial or requires supportive documentation to justify additional income and therefore your ability to repay the loan.

      • Interest Rate: While DBR doesn’t directly impact your mortgage interest rate, it indirectly influences lenders’ perceptions of your creditworthiness. Borrowers with lower DBR ratios are often deemed less risky and may qualify for lower interest rates based on the lender’s pricing strategy, resulting in lower monthly mortgage payments over the life of the loan.

      • Down Payment Requirement: In some cases, lenders may require larger down payments or impose stricter loan terms for borrowers with higher DBR but within the 50% cap mandated by the UAE Central Bank. A larger down payment helps offset the perceived risk associated with a higher DBR, potentially improving your chances of loan approval.


man carrying a heavy bag with Debt written over it

Managing Your Debt Burden Ratio
    1. Reduce Your Debt: To improve your DBR, focus on paying down existing liabilities, such as personal loans, and auto loans. You can also consider reducing your credit card limits. Lowering your debt balances reduces your monthly debt payments, thereby improving your DBR and increasing your chances of mortgage approval.

    2. Increase Income: Consider ways to increase your income to help lower your DBR, such as negotiating a raise at work, taking on a second job,  or pursuing career advancement opportunities. A higher income can offset existing debt obligations, resulting in a more favorable DBR.

    3. Avoid Taking On New Debt: Prior to applying for a mortgage, avoid taking on new debt, such as financing a new car or availing a new personal loan. A new debt will increase your monthly debt payments, which can negatively impact your DBR and mortgage eligibility.


Debt Burden Ratio is a critical factor that lenders evaluate when assessing your mortgage application. By understanding how DBR affects your mortgage eligibility and loan terms, you can take proactive steps to manage your finances, improve your Debt Burden Ratio, and increase your chances of securing a mortgage with favorable terms.

If you’re considering applying for a mortgage, it’s essential to consult with a qualified mortgage advisor such as Lion Mortgage who can provide personalized guidance and help you navigate the complexities of the mortgage approval process.


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