The Total Debt Servicing Ratio (TDSR) caps your total monthly debt obligations at 55% of gross monthly income for any property loan in Singapore as of 2026. Banks apply a stress-test interest rate of 4% per annum when computing TDSR — not your actual loan rate — to ensure repayment capacity holds even if rates rise.
How TDSR is calculated
TDSR was introduced by MAS in June 2013 as a cooling measure and refined to 55% in December 2021. Source: MAS Notice 804 (FHC).
The formula: Total Monthly Debt Obligations ÷ Gross Monthly Income ≤ 0.55.
Debt obligations include: all property loan instalments (including the new application), car loans, education loans, credit card minimum payments, personal loans, renovation loans, and any guarantor liabilities.
Variable income components such as bonuses, commission, and rental income are subject to a 30% haircut — only 70% of these amounts count toward gross income for TDSR. Source: MAS FHC Notice.
The 4% stress-test floor
For property loan eligibility, banks must compute the proposed monthly instalment using the higher of: the actual contractual rate, or a medium-term interest rate floor of 4% per annum.
This is critical for 2026 borrowers: even though floating SORA rates are at 1.27% as of May 2026, banks calculate TDSR using 4%. A borrower who looks comfortable at 1.27% may fail TDSR under the 4% stress.
Worked example: TDSR calculation
| Item | Amount |
|---|---|
| Gross monthly salary | S$8,000 |
| Performance bonus (annualised / 12) | S$1,500 |
| Bonus after 30% haircut | S$1,050 |
| Effective gross income for TDSR | S$9,050 |
| TDSR ceiling (55%) | S$4,978 |
| Existing car loan | S$650 |
| Credit card min payment | S$120 |
| Available headroom for new mortgage | S$4,208 |
| Implied max loan (4% / 25 yr) | S$795,000 |
Without the car loan, this borrower's available headroom rises to S$4,858, and implied maximum loan rises to S$919,000 — a S$124,000 increase in borrowing capacity from clearing a single S$650/month debt.
Three actions that improve TDSR
- Settle small consumer loans: A S$5,000 personal loan with S$200 monthly instalment frees up approximately S$38,000 of mortgage capacity.
- Document variable income: Three years of stable bonus history makes banks more receptive even though the 30% haircut remains regulatory.
- Show co-borrower income: Both spouses' incomes are combined for TDSR. More on Singapore home loan structuring.
Frequently asked questions
Does TDSR apply to refinancing my current property?
TDSR is generally exempted for refinancing of an owner-occupied property as long as you do not increase the loan amount.
How is rental income treated under TDSR?
Banks apply a 30% haircut: only 70% of declared rental income counts toward gross monthly income.
What's the difference between TDSR and MSR?
TDSR (55%) applies to all property loans. MSR (30%) is a stricter cap that applies only to HDB flat purchases and Executive Condominiums.