TDSR and MSR in Singapore: How They Limit Your Property Loan

TDSR and MSR determine how much of your income a lender can recognise for property debt. They do not set the property price, and they do not promise that the bank will lend the maximum. Existing debts, the stress-test rate, loan tenure and available downpayment can all produce a lower budget.

Use the ratios before you shop for a home. A rejected loan after exercising an Option to Purchase can put your option money at risk.

TDSR caps all monthly debt at 55%

The Total Debt Servicing Ratio (TDSR) limits total monthly debt obligations to 55% of gross monthly income. “Total” includes the proposed mortgage and other debts assessed by the lender.

The basic boundary is:

Maximum total monthly debt = gross monthly income × 55%

A household earning $12,000 gross each month has a TDSR boundary of $6,600. If the bank assesses $1,000 of other monthly debt, no more than $5,600 remains for the stressed mortgage payment.

TDSR illustration	Monthly amount
Gross household income	$12,000
55% TDSR boundary	$6,600
Existing debts assessed by lender	($1,000)
Room left for stressed mortgage payment	$5,600

The bank decides how much income it accepts and how it treats each debt. Ask for the calculation behind an in-principle approval if your income includes commission, bonuses, rent or self-employment receipts.

MSR caps the housing instalment at 30%

The Mortgage Servicing Ratio (MSR) limits the monthly instalment for the applicable property loan to 30% of gross monthly income. It applies to loans for HDB flats and to executive condominiums bought from developers where the rule applies.

For the same $12,000 household:

Maximum mortgage payment under MSR = $12,000 × 30% = $3,600

If the household buys an HDB flat with a bank loan, both MSR and TDSR can apply. The TDSR illustration leaves $5,600 for the mortgage, but MSR permits $3,600. MSR becomes the tighter boundary.

For a private condominium that is not subject to MSR, the $5,600 TDSR room may set the ratio boundary. The bank can still approve less.

The stress-test rate changes the loan amount

Banks do not test affordability using only a discounted first-year mortgage rate. For residential property loans granted by private financial institutions, the Government raised the medium-term rate used for TDSR and MSR assessment to the higher of:

• 4% per year; or
• the interest rate that applies after the preferential period.

The rule has applied to relevant purchases where the Option to Purchase was granted on or after 30 September 2022. HDB's joint property-market measures release sets out the current floor and dates.

For HDB housing loans, HDB applies a 3% interest-rate floor when assessing the loan amount. The actual HDB concessionary interest rate follows its own policy.

A stress test protects against a larger future instalment, but it also means a bank's online calculator based on the package headline may overstate your loan.

Loan-to-value is a separate ceiling

The Loan-to-Value ratio (LTV) controls the share of the lower of price or valuation that a lender may finance. TDSR and MSR control the repayment amount relative to income.

A buyer needs to pass both:

Limit	Question it answers
LTV	What percentage of the lower of price or valuation may the loan cover?
TDSR	Can all monthly debts fit within 55% of accepted gross income?
MSR	Can the applicable housing instalment fit within 30% of gross income?
Bank assessment	Will this lender accept the income, credit history and property?

A $1.5 million loan may fit within a 75% LTV ceiling on a $2 million condo, yet fail TDSR. A smaller HDB loan may pass TDSR and fail MSR. The lender grants the lowest amount left after all applicable tests.

Our condo affordability guide combines the loan with downpayment, stamp duty and household reserves.

Existing debts reduce the mortgage room

The lender assesses debts such as car loans, personal loans, education loans and other property loans. Credit-card balances and guarantees may also affect its assessment under prevailing rules and bank policy.

Before requesting an in-principle approval:

1. Pull your credit report and check for errors.
2. List each monthly debt and its remaining term.
3. Gather income documents for every borrower.
4. Tell the bank about ownership of other properties and housing loans.
5. Ask whether a debt ending soon changes the approved amount or timing.

Do not take a new car loan between approval and completion without asking the property lender to reassess the case. The bank can check the file again before drawdown.

A worked comparison: HDB versus condo

Use the $12,000 household with $1,000 of assessed monthly debt.

Test	HDB flat subject to MSR	Private condo not subject to MSR
Gross monthly income	$12,000	$12,000
TDSR boundary	$6,600 total debt	$6,600 total debt
Less other debt	$1,000	$1,000
TDSR mortgage room	$5,600	$5,600
MSR mortgage boundary	$3,600	Not applicable
Ratio boundary before other checks	$3,600	$5,600

The table does not state the final loan. The lender still converts the permitted payment into a loan using the stress rate and tenure, then applies LTV, age and credit rules.

The HDB buyer may qualify for an HDB housing loan instead of bank financing. The HDB Flat Eligibility letter sets out eligibility and the offered loan amount. A bank loan needs its own letter of offer before the relevant purchase step.

Keep your household payment below the regulatory maximum

TDSR and MSR protect the lending system and constrain borrowing. They do not account for your childcare, parental support, irregular medical costs or retirement target.

CPF Board suggests keeping the monthly housing instalment within 25% of gross monthly income as a prudent planning benchmark, below the 30% MSR ceiling. It also recommends considering a $20,000 CPF OA reserve for mortgage payments during an income interruption.

Set your own payment limit after household spending and saving. Then ask the bank what property price that payment supports, rather than starting from the maximum approved loan.

Get the loan checked before paying an option fee

An in-principle approval gives you a lender's estimate based on the information available that day. It can expire or change if your income, debt, interest rate or chosen property changes.

Reconfirm the financing if:

• you change the borrowers or ownership shares;
• the property valuation comes below the price;
• a borrower changes job or income structure;
• you take on new debt; or
• completion falls after the approval expires.

For HDB upgraders, the order of sale and purchase adds CPF refunds and ABSD to the calculation. Use the HDB-to-condo upgrade guide to place the loan approval on the same timeline as both transactions.

Sources: MAS, MND and HDB property-loan measures, CPF Board comparison of HDB and bank loans, CPF property-planning considerations, HDB resale initial-payment guidance.