Cap on total monthly debt repayments (mortgages + car loans + credit card minimums etc.) at 55% of gross monthly income. Applies to all property loans.
The Total Debt Servicing Ratio caps your total monthly debt obligations at 55% of gross monthly income. It applies to all property loans — HDB, private condos, ECs, refinancing.
The 'total debt' bucket includes the new mortgage you're applying for, plus existing housing loans, car loans, study loans, credit card minimum payments, personal loans, and any guarantor obligations.
Banks use a medium-term interest rate of 4% per annum (currently) to stress-test your mortgage instalment, even if the actual rate offered is lower. This prevents borrowers from over-leveraging during low-rate periods.
Variable income (commissions, bonuses, freelance) is haircut by 30% before being included in gross income. Rental income is haircut by 30% too.
Gross monthly income: S$8,000. TDSR ceiling: S$4,400 of monthly debt.
Existing car loan: S$700/month. Credit card minimums: S$200/month. Remaining capacity for the new mortgage: S$3,500/month.
At a stressed 4% rate over 30 years, that capacity supports a loan of ~S$735,000.
If your application fails TDSR, the bank offers a smaller loan or rejects outright. Options to fix it: pay off existing debts first, extend tenure (though capped by age 65 / 75), add a co-borrower with strong income, or buy a cheaper property.
Refinancing has slightly relaxed TDSR rules — the cap can be exceeded if it's purely for the existing home, but expansion of the loan amount triggers the standard 55% cap.
Total Debt Servicing Ratio — a regulatory cap that limits your total monthly debt obligations to 55% of gross monthly income. Applies to all property loans (HDB, EC, private), including new mortgages and refinancing.
All monthly debt: the mortgage you're applying for, existing housing loans, car loans, study loans, credit card minimum payments, personal loans, and guarantor obligations. Banks use a 4% per annum stress-test rate on the new mortgage even if the actual offered rate is lower.
No — banks won't approve a loan that breaches the 55% TDSR ceiling. Options: pay down existing debts first, extend tenure (capped by age 65/75), add a co-borrower with strong income, or buy a cheaper property. Refinancing of an existing home has slightly relaxed rules if the loan amount isn't increased.
TDSR (55%) covers all monthly debt and applies to all property loans. MSR (30%) only covers the housing instalment itself and applies only to HDB and EC purchases. For HDB / EC purchases, you must satisfy both — and MSR typically bites first.