Two rules that determine how much you can borrow for a home in Singapore. Understand them before you start your property search.
When you apply for a home loan in Singapore, banks are required by the Monetary Authority of Singapore (MAS) to check that your monthly loan repayments don't exceed two key thresholds. These are the Mortgage Servicing Ratio (MSR) and the Total Debt Servicing Ratio (TDSR).
Both rules are designed to ensure you don't over-borrow — protecting you from taking on more debt than you can comfortably service over the long term, even if interest rates rise.
Mortgage Servicing Ratio — applies to HDB flats and Executive Condominiums (ECs) purchased directly from developers. Your monthly home loan repayment cannot exceed 30% of your gross monthly income.
Total Debt Servicing Ratio — applies to all property purchases. Your total monthly debt repayments (including the new home loan plus all existing debts) cannot exceed 55% of your gross monthly income.
If you are buying an HDB flat or a new EC, both MSR and TDSR apply. The lower of the two limits determines your maximum loan — which in most cases will be the MSR (30%), since it is the stricter rule for most buyers.
The MSR limits your monthly home loan repayment to 30% of your gross monthly income. It applies specifically to housing loans for HDB flats and Executive Condominiums (ECs) purchased directly from a developer.
MSR applies to ECs purchased directly from developers during the initial launch. It does not apply to ECs bought on the resale market after the 5-year MOP. Resale EC purchases are only subject to TDSR.
The TDSR limits your total monthly debt obligations — including the new home loan plus all existing debts — to 55% of your gross monthly income. It applies to all property purchases, including private condos, landed property, HDB flats and ECs.
Total monthly debt obligations include:
Banks must apply a minimum 30% haircut to variable income components such as commissions, bonuses, and allowances. Only 70% of these income streams can be used in the TDSR calculation. Rental income is also subject to the same 30% haircut.
If you own an existing property and are buying another, your existing property loan monthly repayment may be excluded from the TDSR calculation in certain situations — for example, if you commit to selling the existing property within 6 months of the new purchase. This is commonly used in the sell-then-buy or simultaneous sell-buy scenario.
Banks don't calculate your MSR and TDSR using the actual loan interest rate you'll be paying. Instead, MAS requires them to use a medium-term interest rate floor — a higher, stress-tested rate — to ensure you can still afford repayments even if rates rise.
For private financial institutions (commercial banks), the current stress test rate floor is 4% per annum. If the bank's actual "thereafter rate" on your loan package is higher than 4%, the higher rate is used instead.
Using 4% instead of, say, a 3% actual rate means your computed monthly repayment is higher — which reduces the maximum loan amount you qualify for. This is intentional — it builds in a buffer so you're not over-extended if rates climb.
For HDB concessionary loans (HDB-administered, not bank loans), an interest rate floor of 3% p.a. is used to compute your eligible loan amount. The actual HDB concessionary loan rate is currently 2.6% p.a. (0.1% above the CPF OA rate).
Let's walk through two common scenarios using the MAS stress test rate of 4% p.a., 25-year loan tenure.
Use our free calculators to find your maximum loan, property price, and monthly repayments based on your actual income and debts.
Every existing monthly debt obligation you have — car loan, credit card outstanding, personal loan — directly eats into your TDSR headroom. Since TDSR caps your total monthly debt at 55% of income, every dollar committed elsewhere is a dollar less available for your home loan repayment.
| Existing Monthly Debts | Available for Home Loan | Max Home Loan | Impact |
|---|---|---|---|
| None | S$5,500/mo | ≈ S$1,043,000 | Baseline |
| Car loan S$1,000 | S$4,500/mo | ≈ S$853,000 | − S$190,000 |
| Car loan S$1,500 | S$4,000/mo | ≈ S$758,000 | − S$285,000 |
| Car loan S$1,000 + CC S$500 | S$4,000/mo | ≈ S$758,000 | − S$285,000 |
| Car S$1,000 + Personal S$800 + CC S$300 | S$3,400/mo | ≈ S$644,000 | − S$399,000 |
Approximate figures based on 4% p.a. stress test rate, 25-year tenure, for illustration only.
Many buyers overlook credit card outstanding balances. Banks include a monthly obligation amount derived from your credit card outstanding balance in the TDSR calculation — even if you pay the minimum each month. Clearing outstanding credit card balances before applying for a home loan can meaningfully improve your TDSR headroom.
MSR only applies to the housing loan repayment — it does not include your car loan or credit card obligations. So for HDB and EC purchases, a car loan does not directly affect the MSR calculation. However, TDSR still applies on top of MSR — if your existing debts are large enough to push your TDSR below the MSR limit, TDSR becomes the binding constraint and your car loan will reduce your housing loan eligibility.
Clear outstanding credit card balances before applying. Consider paying down or refinancing your car loan to reduce monthly commitments. Avoid taking on new debt (new car, personal loan, renovation loan) in the 6–12 months before your property purchase. Even a S$500/mo reduction in existing debts can increase your maximum home loan by S$90,000–$100,000.
No — TDSR applies to housing loans from private financial institutions (banks). If you take an HDB concessionary loan directly from HDB, you are subject to HDB's own income-weighted assessment, not the MAS TDSR framework. However, MSR still applies to both bank loans and HDB concessionary loans for HDB flat purchases.
Banks must apply a 30% haircut to variable income. So if you earn a fixed salary of $5,000 and commissions averaging $3,000/mo, your recognised gross monthly income for TDSR/MSR purposes is $5,000 + ($3,000 × 70%) = $7,100 — not $8,000.
Yes — for joint loans, the combined gross monthly income of all co-borrowers is used. Both borrowers' existing debt obligations are also included in the TDSR calculation.
All monthly debt repayments count — other property loans, car loans, personal loans, student loans, and outstanding credit card balances. If you are a guarantor for someone else's loan, at least 20% of that monthly obligation is also counted.
Banks must reduce your loan amount until the TDSR falls within the 55% threshold. Loans above 55% can only be granted in exceptional circumstances, with enhanced credit evaluation and MAS reporting requirements. In practice, if your TDSR is too high, you will need to either reduce your other debts first or buy at a lower price point.
Generally yes — refinancing is subject to TDSR. However, owner-occupiers refinancing their residential property loans are exempt from TDSR, as a concession to allow homeowners to take advantage of lower rates without being constrained by the 55% threshold.
MSR and TDSR are calculated at the point of loan application. If you are planning to buy, check your numbers before signing an OTP — if your TDSR is too high and your loan gets cut, you may not be able to complete the purchase and could forfeit your option fee.
Use our Affordability Calculator to find out exactly how much you can borrow and afford based on your income, debts and savings.
🏠 Try the Affordability CalculatorThis guide is for general informational purposes based on MAS published rules as of 2025. Actual loan eligibility depends on your individual financial profile, the bank's internal credit assessment, and prevailing interest rates. Always consult your bank or a licensed mortgage advisor before making financial commitments. Should you need further clarification or help, please feel free to reach out to me.