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TDSR and MSR for Property Loan in Singapore


When applying for property loan with the banks, borrowers need to be aware that one of the mandatory assessments by banks is the Total Debt Servicing Ratio (TDSR). If the property you purchase is a HDB flat or Executive Condominium (EC), the banks will also look at your Mortgage Service Ratio (MSR). These ratios affect the maximum loan quantum banks can approve for you.

What is TDSR?

Total Debt Servicing Ratio (TDSR) refers to the proportion of your monthly gross income that is spent on debt obligations.

According to MAS policy, TDSR must not exceed 55% (wef 16 Dec 2021).

The monthly debt repayment covers loans from HDB, financial institutions and money lenders in the borrower's name or jointly with another borrower, including the new loan, other existing property loans, car loan, renovation loan, personal/credit card loans, etc.

What is MSR?

Mortgage Service Ratio (MSR) is the proportion of your monthly gross income that is spent on mortgage repayment. This includes debt obligation secured by properties.

According to MAS policy, MSR must not exceed 30%. Applicable to HDB flat and EC.

Banks will require you to comply with the MSR/TDSR requirements before approving your property loan. Under certain conditions, TDSR/MSR exemption can be granted but only for refinancing cases whereby the mortgaged property is owner occupied and bought before MAS implemented the TDSR/MSR ruling in 2013.

How to Calculate TDSR and MSR?

(a) Total Debt Service Ratio (TDSR)

                        Monthly Total Debt Obligations                        

 Gross Monthly Income (excl CPF Contribution by Employer)

(b) Mortgage Service Ratio (MSR)

                        Monthly Total Mortgage Repayment                 

 Gross Monthly Income (excl CPF Contribution by Employer)

What can be considered in Gross Monthly Income?

  • 100% of monthly fixed income
  • Up to 70% of monthly variable income (e.g. allowance, commission, bonus etc)
  • Financial assets, like bank deposit, that are pledged with the bank for 4 years

For joint-ownership, the calculation is based on combined income and combined debt obligations.

How do banks calculate the monthly payment for the new loan? 

The standard calculation is based on:

  1. Medium term rate of 4%(wef 30 Sep 2022) on housing loan and 5%(wef 30 Sep 2022) on non-residential property loan or prevailing rate, whichever is higher.
  2. Actual loan tenor that the borrower is applying. For joint borrowers, loan tenor is determined based on the weighted average age of the borrower, weighted based on their gross monthly income.

Some factors that can affect your TDSR are your salary components, monthly loan commitments, age and loan period. How much income banks can consider is subjective especially If your salary includes variable components, or you are self-employed or working overseas. Under some circumstances, the outcome may differ from banks to banks.

Nowadays, there are many TDSR calculators available on various websites. Nothing is more certain than to formally apply for In Principle Approval with banks. Let our Mortgage Consultant help you move forward. 


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