How To Budget For Your First Home

What Is ‘Myra’s Golden Rule?’

Category: Step 1: Find Your Dream Home | Tags: Finance, Loans, The Journey

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!

How useful was this post?

Click on a star to rate it!

Average rating 4.5 / 5. Vote count: 66

No votes so far! Be the first to rate this post.

We are sorry that this post was not useful for you!

Let us improve this post!

Tell us how we can improve this post?