Regulatory Alerts2021-06-17
Guideline on the Computation of Debt-to-Income Ratio for Residential Property Loans
The Bank of Mauritius mandates a 50% debt-to-income ratio limit for all licensed banks granting credit facilities for residential property purchases or construction. Banks must calculate the ratio using a standardized formula that caps variable income at 70%, verify borrower declarations against the MCIB database, and establish annually reviewed internal limits approved by their boards. While the cap applies broadly, specific categories such as low-cost housing borrowers and fully secured loans are exempt, with the regulator retaining authority to conduct supervisory reviews and impose fines for non-compliance.
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