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What Is TDSR in Singapore?
The Total Debt Servicing Ratio (TDSR) is a MAS-mandated framework introduced in June 2013 to ensure Singapore property buyers do not overleverage themselves. TDSR limits total monthly debt obligations to 55% of a borrower’s gross monthly income.
TDSR applies to all property loans from financial institutions in Singapore, covering: private condominiums, landed property, commercial property, and industrial property. HDB housing loans are not subject to TDSR but have their own Mortgage Servicing Ratio (MSR) framework.
TDSR Formula: How It Is Calculated
TDSR = Total Monthly Debt Obligations / Gross Monthly Income × 100%
Total monthly debt obligations include ALL existing and proposed debts:
- Proposed new home loan monthly instalment
- Existing mortgage(s) on other properties
- Car loan instalments
- Credit card minimum payments (typically 5% of outstanding balance)
- Personal loan instalments
- Student loan instalments
- Any other monthly debt commitments
TDSR Worked Example: $1.5M Condo Purchase
| Scenario | Amount |
|---|---|
| Gross Monthly Income | $12,000 |
| TDSR 55% Cap (max all debts) | $6,600 |
| Existing car loan | $800 |
| Credit card min payment | $200 |
| Available for home loan | $5,600 |
| Max loan at $5,600/month (30yr, 4.5% stress rate) | ~$1,053,000 |
| Required loan (75% of $1.5M) | $1,125,000 |
| TDSR status | FAILS TDSR |
Solution: Pay down car loan, reduce credit card balance, or lower the purchase price / increase downpayment to reduce the loan quantum.
Stress-Test Rate: How Banks Calculate Monthly Instalment for TDSR
Banks do not use the actual mortgage interest rate to compute TDSR. They use a stress-test rate of at least 4.0%–4.5% (MAS-prescribed minimum floor) to ensure borrowers can service the loan even if rates rise. This means:
- Actual prevailing rate: 3.5%
- TDSR stress-test rate applied: 4.5%
- Monthly instalment computed at 4.5% (higher) for TDSR assessment
This conservative calculation means your TDSR-compliant loan quantum is lower than what the actual prevailing rate would suggest.
Income Sources Banks Accept for TDSR Calculation
- Fixed income: Salary/wages — 100% credited to gross income
- Variable income (commissions, bonuses): Typically 70% of 12-month average credited
- Rental income: Typically 70% of rental income credited (after vacancy haircut)
- Dividends/investment income: Subject to bank-specific policies, typically requires 24-month track record
- Director fees / self-employment: Latest 2 years’ IRAS NOA used, variable income haircut applied
How to Improve Your TDSR Before Buying
- Pay off car loans: A $1,000/month car loan frees up ~$200,000 in loan quantum at current rates
- Clear credit card balances: $10,000 in credit card outstanding reduces TDSR capacity by $500/month (5% min payment)
- Cancel unused credit cards: Banks may include credit limits in TDSR calculations for some assessments
- Increase income documentation: Ensure all income streams are documented with 12–24 months of payslips and IRAS NOA
- Larger downpayment: A bigger downpayment reduces the loan quantum and therefore the required monthly instalment
Get personalised advice from a licensed property consultant. Free, no-obligation consultation.
Related Guides
- Condo Downpayment Calculator Guide 2026
- LTV Limit & Property Loan Guide Singapore
- CPF Usage for New Condo Guide
- First-Time Buyer Complete Guide 2026
