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This ratio measures the proportion of ‘take home’ income, less CPF contributions that is used to make regular repayments of debt. ‘Take home’ income is all your income inclusive of interest income, rental income and dividend income minus both employer and employee CPF contributions.

A ratio of 35% or below indicates that there is enough “take home” income for your debt repayments. If it is more than 45%, you better watch out as you may risk failing to meet your monthly debt repayments!

 Debt Service Ratio = Total Monthly Debt Repayment divided by the Monthly “Take Home” income