By MoneyBees
Check your TDSR and MSR with MAS's rules: the 55% and 30% limits, the 4% stress rate, haircuts on variable income and savings, and your maximum loan.
The Total Debt Servicing Ratio is the share of your gross monthly income that goes to debt repayments, the new property loan included. MAS caps it at 55% for property loans from banks and other financial institutions.
Add up your monthly debt payments, with the new property loan worked out at the higher of 4% and its actual rate, and divide by your gross monthly income after MAS's haircuts. S$5,170 of debts on S$9,400 of income is exactly 55%.
TDSR covers all your debts and applies to every property loan from a bank. MSR covers only property loans and applies to HDB flats and to ECs bought from the developer within their minimum occupation period. MSR is capped at 30%, so it is usually the tighter limit for those buyers.
MAS makes banks test the new property loan at the higher of a 4% floor and the rate that applies after any lock-in, so you can still afford it if rates rise. Non-residential property uses 5%. Your real instalment is still worked out at your own rate.
At no more than 70%. Bonus, commission and allowances are averaged over the last 12 months, and both they and rental income take a haircut of at least 30%.
Yes. Savings and investments count as income spread over 48 months. Unpledged, they count at 30% of their value. Cash pledged to the bank for 4 years counts in full, and other pledged assets at 70%. S$500,000 of unpledged cash adds S$3,125 a month.
At the minimum payment due on each card. Secured revolving credit, such as a line backed by property, counts the amount drawn at the 4% rate.
Only in exceptional cases, at the bank's own judgement. If your TDSR is over the limit and someone guarantees the loan, MAS requires the guarantor to become a co-borrower so their income and debts count too.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).