Before you fall in love with a property, Singapore's mortgage framework will impose two hard mathematical ceilings on how much you can borrow. The Total Debt Servicing Ratio (TDSR) and the Mortgage Servicing Ratio (MSR) are not suggestions — they are MAS-mandated limits that every bank must apply when assessing your loan. Get them wrong in your planning and you may find yourself short by hundreds of thousands of dollars on completion day.
This guide explains exactly how TDSR and MSR work, shows you the formulas, walks through two detailed worked examples (a single buyer and a couple with an existing car loan), and gives you six practical strategies to maximise your borrowing capacity within the rules. All figures reflect 2026 MAS guidelines.
For the complementary picture of how your age affects loan tenure and LTV, see our LTV, CPF Limits & Age Restrictions guide. For mortgage structure choices between fixed and floating rates, see Fixed vs Floating Rate Mortgages. To run your own numbers immediately, use our TDSR Calculator.
Overview: Two Ratios, One Goal
The MAS introduced TDSR in 2013 and tightened it to its current level in 2022. The policy goal is straightforward: ensure Singaporeans do not overextend themselves on debt relative to their income. Unlike LTV ratios (which constrain the loan quantum against the property value), TDSR and MSR constrain it against your income — making them the income-side gate to any property purchase.
- TDSR applies to all property types: private condominiums, landed property, HDB flats, executive condominiums, and commercial property. It caps your total monthly debt obligations at 55% of gross monthly income.
- MSR applies only to HDB flats and Executive Condominiums (ECs) — it does not apply to private condominiums or landed property. It imposes an additional, tighter cap: your housing loan instalment alone cannot exceed 30% of gross monthly income.
In practice, for HDB and EC buyers, the MSR is usually the binding constraint — 30% is a tighter ceiling than the 55% TDSR for housing debt alone, and it leaves very little room for other debts. For private property buyers, TDSR is the only hurdle, but it must account for every debt obligation you carry.
TDSR Explained: The Formula
TDSR measures the share of your gross monthly income consumed by all debt repayments — your new property loan plus every other outstanding debt you hold. The formula is:
TDSR = (Total monthly debt obligations ÷ Gross monthly income) × 100%
Maximum allowed: 55%
What counts as "total monthly debt obligations"?
- The proposed new property loan instalment (stress-tested — see below)
- Any existing property loan instalments
- Car loan or hire purchase repayments
- Student loan repayments
- Credit card minimum payments (banks typically use 5% of the outstanding balance per month)
- Personal loan repayments
- Any other formal debt obligations
What counts as "gross monthly income"?
This is where banks apply their own interpretations within MAS guidelines. The short answer: they count less than you might expect. The section on income calculation below covers all income types in detail.
The Stress Test Rate
Banks do not calculate your instalment using your actual mortgage rate. They apply a stress test rate — a deliberately higher rate — to ensure you can still service your debt if interest rates rise. The 2026 rule is:
With current SORA-linked mortgage rates at roughly 3.0–3.5% all-in, the stress test typically floors at 4.0% p.a. for most borrowers in 2026.
This means your TDSR headroom is calculated on the instalment at 4.0%, not at your actual rate of (say) 3.2%. The difference is meaningful: on a S$1,000,000 loan over 25 years, the monthly instalment at 3.2% is approximately S$4,840, while at 4.0% it rises to approximately S$5,278 — a difference of S$438/month that directly reduces your apparent affordability.
MSR Explained: HDB and EC Buyers Only
The Mortgage Servicing Ratio applies exclusively to loans for HDB flats and Executive Condominiums. It imposes a separate, tighter ceiling specifically on the housing loan component of your debt:
MSR = (Monthly housing loan instalment ÷ Gross monthly income) × 100%
Maximum allowed: 30%
The MSR stress test uses the same 4.0% floor as TDSR. Unlike TDSR, MSR only counts the housing loan — not car loans, credit cards, or other debts. But precisely because it is capped at 30%, it severely limits the maximum affordable loan for HDB and EC buyers.
Why MSR Is Usually the Binding Constraint for HDB/EC
Consider a buyer with S$8,000 gross monthly income and a car loan of S$1,000/month. Their TDSR headroom for all debt is S$8,000 × 55% = S$4,400. After the car loan, they have S$3,400 left for their housing loan — which corresponds to a TDSR-compliant housing payment of S$3,400. But MSR caps their housing payment at S$8,000 × 30% = S$2,400. MSR wins: the housing loan instalment is limited to S$2,400, not S$3,400.
This is the typical pattern: for HDB and EC buyers with any other debts, MSR bites first and TDSR rarely becomes the operative constraint.
How Banks Count Your Income
Banks do not simply accept the gross salary figure on your payslip. They apply haircuts to variable and non-employment income to account for uncertainty. The table below summarises how different income types are treated for TDSR purposes in 2026:
| Income Type | How Banks Count It | Notes |
|---|---|---|
| Fixed monthly salary | 100% of gross salary | Must be evidenced by payslips and Notice of Assessment (NOA) |
| Commission / variable pay | Typically 70% of 12-month average | Banks average over the most recent 12 months, then apply the 70% haircut |
| Annual bonus | Typically 70% of average, divided by 12 | Some banks require 2-year average; inconsistency across lenders |
| Self-employment / business income | 70% of average net profit (typically 2 years of NOA) | NOA required; some banks require certified accounts |
| Rental income | 70–80% of gross rent | Evidenced by tenancy agreement; some banks require 6 months of bank statements showing receipt |
| CPF contributions (employer + employee) | Counted as income for TDSR purposes | Banks include total CPF contributions (both employee and employer portions) in gross income |
| Overseas income | Varies; typically 70% with additional haircut for currency risk | Must be converted to SGD; some banks apply a further 10–20% forex haircut |
| Investment / dividend income | Generally not counted unless consistent over 2+ years | Passive income is treated very conservatively; confirm with your bank |
Worked Example 1: Single Buyer, S$10,000 Income, No Other Debts
Meet Wei Ling. She is a 32-year-old Singapore Citizen earning S$10,000 gross per month as a salaried employee. She has no car loan, no student loan, and no credit card balances. She wants to buy a private condominium — her first property. What is her maximum affordable property price?
Step 1: Determine TDSR headroom
TDSR limit: S$10,000 × 55% = S$5,500/month available for all debt obligations. Since she has no other debts, her entire TDSR headroom is available for the mortgage instalment.
Step 2: Maximum stress-tested instalment
Maximum monthly instalment (stress-tested): S$5,500
Step 3: Back-calculate maximum loan quantum
Using the stress test rate of 4.0% per annum over 30 years (she is 32, so 30 years ends at 62 — within the age-65 boundary, full LTV applies), the maximum loan quantum that produces a S$5,500 monthly instalment is approximately:
Maximum loan quantum ≈ S$1,150,000
(At 4.0% over 30 years, S$1,150,000 produces a monthly instalment of approximately S$5,492 — just within the S$5,500 TDSR ceiling.)
Step 4: Back-calculate maximum property price
With a first-property LTV of 75%, the loan represents 75% of the purchase price:
Maximum property price = S$1,150,000 ÷ 75% = S$1,533,000
| Item | Amount |
|---|---|
| Gross monthly income | S$10,000 |
| TDSR limit (55%) | S$5,500/month |
| Existing monthly debts | S$0 |
| Available for housing instalment (stress-tested) | S$5,500/month |
| Maximum loan quantum (4.0%, 30 years) | S$1,150,000 |
| Maximum property price (75% LTV) | S$1,533,000 |
| Minimum cash downpayment (5%) | S$76,650 |
| CPF OA for remaining downpayment (up to 20%) | Up to S$306,600 |
Use our TDSR Calculator and Mortgage Calculator to model your own scenario in detail.
Worked Example 2: Couple with Car Loan, S$18,000 Combined Income
Now consider Raj and Mei Lin, a married couple. Raj earns S$11,000/month (fixed salary) and Mei Lin earns S$7,000/month. They have a joint car loan with a remaining monthly instalment of S$800/month. They want to buy a private condominium as their first joint property.
Step 1: Combine income and apply TDSR
Combined gross monthly income: S$11,000 + S$7,000 = S$18,000
TDSR limit: S$18,000 × 55% = S$9,900/month total debt capacity
Step 2: Subtract existing debts
Car loan: S$800/month
Remaining TDSR headroom for housing: S$9,900 − S$800 = S$9,100/month
Step 3: Maximum loan quantum
Maximum stress-tested instalment for the mortgage: S$9,100/month
At 4.0% over 30 years (Raj is 35, Mei Lin is 33 — weighted average age ≈ 34, 30-year tenure ends at age 64, within the age-65 boundary), the maximum loan quantum is approximately:
Maximum loan quantum ≈ S$1,905,000
(At 4.0% over 30 years, S$1,905,000 produces approximately S$9,096/month.)
Step 4: Maximum property price
Maximum property price = S$1,905,000 ÷ 75% = S$2,540,000
| Item | Amount |
|---|---|
| Combined gross monthly income | S$18,000 |
| TDSR limit (55%) | S$9,900/month |
| Car loan instalment | −S$800/month |
| Available for housing instalment (stress-tested) | S$9,100/month |
| Maximum loan quantum (4.0%, 30 years) | S$1,905,000 |
| Maximum property price (75% LTV) | S$2,540,000 |
| Minimum cash downpayment (5%) | S$127,000 |
6 Strategies to Maximise Your Borrowing Capacity
1. Clear High-Cost Debts Before Applying
Every S$100/month in existing debt repayments reduces your TDSR-eligible mortgage instalment by S$100 — which translates to roughly S$21,000 less in loan quantum (at 4.0% stress rate over 30 years). If you are carrying a personal loan, car loan nearing its end, or significant credit card balances, pay them down before your mortgage application. The arithmetic strongly rewards debt clearance before purchase.
2. Time Your Application Around Variable Income
Banks count commission and bonus income at 70% of a 12-month average. If your variable income was unusually low in the past 12 months, waiting for a stronger period before applying can meaningfully increase your counted income. Conversely, if you know your next commission cycle peaks in March, apply in April — ensuring that cycle is fully reflected in the averaging window.
3. Include Rental Income Properly
If you own another property that generates rental income, make sure you declare it and provide a current tenancy agreement supported by bank statements showing rent receipts. Banks will count 70–80% of gross rent toward your income, which can add S$1,400–S$2,000/month or more to your counted income depending on your rental quantum — directly expanding your TDSR headroom.
4. Add a Co-Borrower with Income
Adding a co-borrower (spouse, sibling, parent, or adult child) pools incomes for TDSR purposes. A co-borrower earning S$5,000/month adds S$2,750/month to your TDSR headroom (55% × S$5,000), which supports roughly S$574,000 in additional loan quantum. The co-borrower's debts are also included, so the net benefit depends on how clean their debt profile is.
5. Reduce Credit Card Minimum Payment Exposure
Many buyers overlook that banks count 5% of all credit card outstanding balances as a monthly obligation. A combined credit card balance of S$30,000 adds S$1,500/month to your counted debts — reducing your housing TDSR headroom by S$1,500/month and your maximum loan by approximately S$314,000. Pay down balances, not just instalments, before applying.
6. Shop Across Banks for the Highest Stress-Test Tolerance
While MAS sets the 4.0% stress test floor, some banks apply the floor more rigidly than others for borderline cases, and the treatment of variable income and employer CPF can differ by institution. Getting in-principle approvals from two or three banks before committing to an OTP gives you real data on your maximum loan quantum across lenders. The variance can be S$50,000–S$100,000 or more on a S$1–2 million loan. See our mortgage guide for tips on comparing bank offers.
Common Mistakes to Avoid
Frequently Asked Questions
Does MSR apply to Executive Condominiums bought on the resale market?
Yes — but only during the HDB loan-qualifying period. ECs are subject to MSR during the initial purchase from the developer and until the Minimum Occupation Period (MOP) of 5 years is completed. Once the MOP is satisfied and an EC is sold on the open market as a fully privatised property (after 10 years), MSR no longer applies and only TDSR governs subsequent buyers. If you are buying a recently MOP-ed EC on the resale market, confirm with the developer or HDB whether MSR still applies to your specific unit's timeline.
My income includes CPF contributions — do I add the employer CPF to my gross income?
Yes. MAS guidelines for TDSR include both employee and employer CPF contributions as part of gross monthly income. For an employee aged 35 or below earning S$7,400/month (at the OW ceiling), the employer CPF contribution is 17% of S$7,400 = S$1,258. Total gross for TDSR is therefore approximately S$8,658 — not just S$7,400. This can add S$693/month to your TDSR ceiling (S$1,258 × 55%), supporting roughly S$145,000 more in loan quantum. Always confirm how a specific bank treats employer CPF; most include it, but methodologies can vary.
If I earn mostly commission, how do banks calculate my TDSR income?
Banks average your commission income over the most recent 12 months (using payslips and the prior year's Notice of Assessment) and then apply a 70% haircut to the average. So if your average monthly commission over 12 months was S$8,000, the bank counts S$8,000 × 70% = S$5,600/month as your income for TDSR. Some banks are stricter and require a 24-month average or a consistent track record of commissions across both years. If your income is predominantly commission-based, getting an in-principle approval from your bank before signing an OTP is essential — you need to know what income figure they will accept.
Can I use rental income from my current property to boost my TDSR for a new purchase?
Yes, provided you can document it. You will need a valid tenancy agreement and typically 3–6 months of bank statements showing rent deposits. Banks count 70–80% of the gross monthly rental. However, the outstanding loan on the rented property also counts as a debt obligation in your TDSR, and any second property IRAS ABSD ratesABSD must still be paid. Run the full TDSR calculation including both the rental income boost and the existing property loan obligation before relying on this strategy.
How does the stress test rate work if I take a fixed-rate mortgage?
The stress test applies regardless of whether your mortgage is fixed or floating. Even if you lock in a fixed rate of 2.8% for the first 3 years, the bank still stress-tests your TDSR at 4.0% (or actual rate + 0.5%, whichever is higher). The rationale is that fixed rates are temporary — after the fixed period ends, you re-price at prevailing rates, which could be higher. The stress test ensures you can service the debt even after the fixed period expires. In 2026, with most fixed rates between 2.8–3.3%, the stress test floors at 4.0% for virtually all borrowers.
My partner and I plan to buy together. Do both our debts count in TDSR?
Yes. When co-borrowers apply jointly, the bank aggregates all income from all co-borrowers and also aggregates all debt obligations from all co-borrowers. If your partner has a personal loan of S$500/month and a car loan of S$900/month, those S$1,400/month of obligations are included in the TDSR calculation alongside yours. The net benefit of adding a co-borrower is the income uplift minus the debt drag. It is always worth modelling both the solo and joint scenarios before deciding on the borrowing structure, especially if one partner carries significant existing debts.