DSTI: the affordability rule that sizes your loan
Debt-service-to-income (DSTI) is the share of your net monthly income that goes to loan payments. Estonian mortgage rules set a ceiling on this ratio, and banks must test it against a higher interest rate than today’s — so the loan you are offered already assumes rates could rise.
How banks compute your DSTI
The bank adds up all your monthly credit obligations — the new loan’s payment plus existing loans, leases, credit card and overdraft limits — and divides by your net income. Regular, documented income counts; volatile income is typically counted conservatively or partially.
Crucially, the mortgage payment in this calculation is not today’s payment: regulation requires an interest-rate stress test, computing your payment at a rate meaningfully above the current one. Passing at the stressed rate is what protects you from payment shock when Euribor rises.
What counts as debt — more than you think
Unused credit card limits and overdrafts often count as obligations even if you never draw them, because you could. Closing unused credit lines before applying is one of the few quick, legitimate ways to improve your assessed capacity.
Co-signed loans and guarantees you have given also appear in the calculation. Small consumer loans and buy-now-pay-later balances add up faster than most applicants expect — see how they interact with a personal loan application.
What to do if you hit the ceiling
Options banks accept: a longer maturity (within the 30-year cap) to lower the monthly payment, a larger down payment to shrink the loan, repaying or closing existing credit lines, or adding a co-borrower whose income enters the calculation.
What does not work: taking another loan to bridge the gap — it raises the very ratio being tested. If the numbers are close, comparing banks matters: income counting rules differ at the margins.
Frequently asked questions
What DSTI limit applies in Estonia?+
Eesti Pank sets the binding limit and reviews it periodically; banks also have a small regulated allowance for exceptions. Check the current percentage with Eesti Pank or your bank — the principle (payments capped relative to net income, tested at a stressed rate) is stable even when the number moves.
Do credit cards I never use really count?+
Usually yes — the limit is available credit you could draw at any time. Closing unused cards and overdrafts before a mortgage application is a legitimate way to improve your assessed capacity.
Is rental income counted?+
Banks differ: documented, stable rental income is often counted partially. Ad-hoc or undocumented income generally is not. Ask each bank how it treats your income mix — it is a real reason results differ between banks.
Why did the bank offer me less than an online calculator suggested?+
Public calculators rarely apply the full stress test and cannot see your other obligations. The bank’s number includes both, so it is usually lower — and it is the binding one.
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