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Jonathan and Priya had been to three showflats before Tengah Garden Walk EC. Every time, they’d been handed a financing sheet and smiled at. “Can we afford this?” Jonathan finally asked directly. Their agent didn’t answer clearly. This guide will.
Two Limits That Apply to EC Buyers
When you buy an EC with a bank loan, two separate borrowing limits apply:
- MSR (Mortgage Servicing Ratio) — 30% of gross monthly income
- TDSR (Total Debt Servicing Ratio) — 55% of gross monthly income
Both limits apply simultaneously. The binding constraint is whichever gives you a lower loan amount — which for most EC buyers is the MSR.
How MSR Works: The EC-Specific Rule
MSR is unique to HDB flats and ECs. It caps your monthly mortgage payment at 30% of your gross monthly income.
Formula: Maximum monthly mortgage = Gross monthly income × 30%
Example:
Household gross income: $14,000/month
Maximum monthly mortgage: $14,000 × 30% = $4,200/month
At the current medium-term interest rate of 4.5% per annum (used for stress testing), a $4,200/month payment over 25 years supports a loan of approximately $791,000.
How TDSR Works: The Broader Limit
TDSR covers all your debts combined — mortgage, car loan, credit card, personal loan. Total monthly debt repayments cannot exceed 55% of your gross income.
Formula: Total monthly debts ≤ Gross monthly income × 55%
Example:
Household gross income: $14,000/month
Car loan: $800/month
Credit card minimum: $200/month
TDSR ceiling: $14,000 × 55% = $7,700
Available for mortgage: $7,700 − $800 − $200 = $6,700/month
In this case, MSR ($4,200/month) is still the binding constraint — not TDSR.
Calculation Table: Maximum Loan by Income Level
Based on MSR at 30%, 4.5% stress test rate, 25-year tenure:
| Monthly Income | Max Monthly Mortgage (MSR 30%) | Max Loan (25yr, 4.5%) |
|---|---|---|
| $10,000 | $3,000 | ~$565,000 |
| $12,000 | $3,600 | ~$678,000 |
| $14,000 | $4,200 | ~$791,000 |
| $16,000 (ceiling) | $4,800 | ~$904,000 |
What Income Counts Toward TDSR and MSR?
Gross income includes base salary, fixed allowances, and variable bonuses (at 70% haircut). Rental income is typically counted at 70% of stated rent. Commission income also takes a haircut — banks typically average your last 12–24 months of variable income.
If you’re self-employed, banks will use your Notice of Assessment from IRAS. Some banks require 2 years of business track record.
The Minimum Cash Requirement
EC purchases require:
- 5% cash — must be paid in cash, cannot use CPF
- 15% CPF or cash — can use CPF OA
- Remaining 80% — bank loan (subject to TDSR/MSR)
For a $1.5M EC unit, the 5% cash component is $75,000. Make sure you have that liquid before committing to a purchase.
Get a Precise Calculation Before April 11
Every buyer’s situation is different — outstanding car loans, credit card balances, and variable income all affect your final borrowing limit. Don’t guess.
Alvin provides a free, no-obligation financial analysis for Tengah Garden Walk EC buyers before the VVIP Preview on April 11, 2026.
📱 WhatsApp: +65 8488 8648
Get your numbers right before you step into the showflat.
Related: Tengah Garden Walk EC Financing Guide | CPF Grant and HDB Upgrade Guide
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