Two numbers decide every home loan here. Neither is the rate the bank advertises. The first is 55%. That is the share of your monthly income your debt repayments cannot go past. The second is 4%. That is the rate the bank must use to work out your loan size, even when your package charges far less. Know both numbers and you can estimate your own budget, before a banker runs it for you.
What is TDSR, in one formula?
"All existing monthly debt" covers a lot. Other home loans. Car loans. Renovation and study loans. Personal credit lines. Even the minimum payment on a credit card balance. The bank then works backwards. It takes 55% of your income, subtracts those debts, and what is left is the largest instalment you may pay on the new mortgage.
That instalment is turned into a loan size at the 4% test rate. Not at the 1.4–1.9% packages on offer today (see current mortgage rates). This is why a loan that fits your budget comfortably can still be cut down. MAS wants the loan to stay affordable if rates climb later, not just at the rate you pay now.
How much can you borrow at your income?
The table below shows your estimated maximum loan at each income level, before tax and CPF, assuming no other debt. Treat these as planning numbers, not an approval. The bank still checks your credit record, your income mix and your full application before it lends anything.
| Gross monthly income | Max debt service (55%) | Max loan · 30-yr @ 4% | Max loan · 25-yr @ 4% |
|---|---|---|---|
| $4,000 | $2,200 | ~$461,000 | ~$417,000 |
| $5,000 | $2,750 | ~$576,000 | ~$521,000 |
| $6,000 | $3,300 | ~$691,000 | ~$625,000 |
| $8,000 | $4,400 | ~$922,000 | ~$834,000 |
| $10,000 | $5,500 | ~$1,152,000 | ~$1,042,000 |
| $12,000 | $6,600 | ~$1,382,000 | ~$1,250,000 |
| $15,000 | $8,250 | ~$1,728,000 | ~$1,563,000 |
| $20,000 | $11,000 | ~$2,304,000 | ~$2,084,000 |
Two things stand out. A two-income household on $8,000 a month is the typical upgrader. It qualifies for roughly $922,000 of loan. At 75% Loan-to-Value, that supports a price near $1.23 million. You still need cash and CPF for the other 25% on top. The tenure columns say something else. Taking 30 years instead of 25 adds $50,000–$100,000 to your loan at normal income levels. Most buyers never factor that in.
How much does existing debt cut from your loan?
The rule of thumb is simple. At the 4% test rate over 30 years, every $500 a month you already owe cuts roughly $100,000 off your property loan. Here is how that plays out for the same $8,000 household as its other debts rise.
| Existing monthly debt | Remaining capacity for property loan | Max property loan (30-yr @ 4%) |
|---|---|---|
| $0 — no existing debt | $4,400 | ~$922,000 |
| $500 — e.g. a car loan | $3,900 | ~$817,000 |
| $1,000 — car + study loan | $3,400 | ~$712,000 |
| $1,500 — multiple obligations | $2,900 | ~$607,000 |
| $2,000 — heavy existing debt | $2,400 | ~$503,000 |
Look at row three. A typical $1,000 car loan costs this household about $210,000 of property loan. That is often the exact gap between a two-bedder and a three-bedder in the same project. Planning to upgrade in the next 12 to 18 months? Clearing or refinancing that debt first is usually the fastest way to lift your budget.
What other rules affect how much you can borrow?
Variable income is cut by 30%. Commissions, bonuses, allowances and rental income count at only 70% of their value. So someone earning $10,000 a month, all of it variable, is assessed as if they earn $7,000. That cuts their maximum loan by almost a third against the same amount in fixed salary. If you are self-employed or on commission, budget on the lower figure from day one. There is a way to close a shortfall. MAS lets banks count assets you pledge, or simply show, as extra income. Our pledging and unpledging guide works through the numbers.
HDB flats and new executive condominiums face a second cap. It is called the Mortgage Servicing Ratio, or MSR. TDSR looks at your mortgage plus every other debt. MSR looks at the mortgage alone, and caps it at 30% of income. 30% is a lower ceiling than 55%, and no other debt competes for that room. So most HDB and EC buyers hit MSR first, before TDSR is even reached. Buying a private condo? Only TDSR applies.
Your age and loan length set the deposit. The standard 75% Loan-to-Value limit needs two things to be true. Your loan must stay within the 30-year cap for private property. And it must be fully repaid by the time you turn 65. Miss either one and your LTV drops from 75% to 55%, so you find another 20% of the price in cash and CPF. Joint buyers get one useful wrinkle. The age used is not simply yours. It is an average, weighted by how much each borrower earns. Adding a younger co-borrower who earns more pulls that average down, which can win back both the 30-year tenure and the 75% LTV.
Refinancing your own home is exempt. TDSR does not apply when you refinance the home you live in. So a drop in income cannot trap you in a costlier package.
How do you work out your own number?
Do this before you start viewing, not after. It sets your budget. Six steps:
- Add up your household income before tax and CPF.
- Cut any variable portion by 30%.
- Multiply the result by 55%.
- Subtract every existing monthly commitment.
- Turn what is left into a loan, at the 4% test rate, over a tenure you can live with.
- Add your cash and CPF on top, at 75% LTV.
That total is your realistic ceiling. Prefer to skip the arithmetic? Our affordability calculator runs the same six steps for one or two buyers. It is also the starting number for upgraders in Selling your HDB to buy a new launch, and the number every payment stage in Buying a new launch condo is built on.
The short version
What to remember
- The cap on all your monthly debt55% of income before tax and CPF
- The rate your loan is sized at4%, not the 1.4–1.9% you pay
- Max loan on $8,000 a month, no other debtAbout $922,000 over 30 years
- Price that supports, at 75% LTVNear $1.23 million
- Cost of every $500 of existing debtAbout $100,000 of loan
- How commission and bonus income counts70% of its value
- Second cap for HDB and new EC buyersMSR, 30% of income, usually bites first
- If the loan runs past 30 years or age 65LTV falls from 75% to 55%
So what should you do with this? Work out your own number first, using the six steps above or our affordability calculator. Then check one thing: is any existing loan due to finish in the next year? Clearing it before you apply is usually worth more to your budget than a better interest rate. If the number falls short of the home you want, read the pledging and unpledging guide before you shrink your shortlist.
Frequently asked questions
What is TDSR?
TDSR is a rule from MAS. It caps all your monthly debt at 55% of your income before tax and CPF. That includes the new mortgage plus car loans, personal loans and credit card minimums. It applies to every property loan except one: refinancing the home you live in.
What is the 4% stress-test rate?
It is the lowest rate a bank is allowed to use when it checks if you can afford a home loan. Your loan size is set by what you could pay at 4% interest. That holds even if your actual package charges 1.4%.
What counts as debt?
Other home loans. Car loans. Renovation and study loans. Personal credit lines. Minimum payments on credit card balances. And at least 20% of the instalment on any loan you have guaranteed for someone else.
TDSR vs MSR — what is the difference?
TDSR caps your total monthly debt at 55% of income and applies to every property loan. MSR is a second cap for HDB flats and new ECs only. It limits the housing instalment alone to 30% of income. Private condo buyers face TDSR only. HDB and new EC buyers must clear both, and MSR usually bites first.
How is variable income treated?
Commissions, bonuses, allowances and rental income count at only 70% of their value. So if you earn entirely from these sources, the bank assesses you on 70% of what you actually make. Someone on $10,000 a month is treated as earning $7,000.
How much does a car loan cost me in property loan terms?
Roughly $100,000 of loan for every $500 you pay each month, at the 4% test rate over 30 years. So a $1,000 car loan cuts about $200,000 off what you can borrow. That is often the gap between a two-bedder and a three-bedder in the same project.
Does tenure change my maximum loan?
Yes. The same monthly payment spread over 30 years instead of 25 buys about 10% more loan. But watch the limits. If the loan runs past the 30-year cap, or past age 65, your LTV drops from 75% to 55%. That costs you roughly a quarter of the loan — a much bigger hit than the 10% the extra years gained you.
Is anything exempt from TDSR?
There is one main exemption. If you refinance the mortgage on the home you live in, the 55% cap does not apply. So a drop in income cannot trap you in a costly package. This does not cover new purchases, and it does not cover refinancing an investment property.
Update history
- Plain-English rewrite for first-read clarity. Added a "short version" summary, a step-by-step method for working out your own number, and a link to the affordability calculator. No figures or rules changed.
- Added a link to our guide on pledging and unpledging financial assets to qualify for a bigger loan.
- Guide published. Tables computed at the 55% TDSR threshold and 4% medium-term stress rate over 25- and 30-year tenures.
Methodology & sources. Thresholds, haircuts and exemptions follow MAS's TDSR framework and current LTV rules. Loan amounts in the tables are calculated as standard amortising loans at the 4% p.a. stress rate, rounded to the nearest $1,000.
Disclaimer. All figures are illustrative estimates for education, not financial advice and not a promise of loan approval. Actual eligibility depends on your credit profile, income mix, existing obligations, property type and the bank's assessment. Speak with a mortgage specialist or your bank for a personalised computation.
Talk it through with an advisor
Our research tells you what the data says. If you want to work through what it means for your own situation — budget, ABSD position, timing an HDB sale, or comparing launches against resale options — you can request a one-to-one consultation.
- No obligation. The first conversation is about your goals.
- Affordability and stamp duty worked out on your actual numbers.
- Launch and tender alerts for the projects you shortlist.
Disclosure: advisory consultations are provided by Jamus Lee (CEA Reg. No. R065771E, ERA Realty Network Pte Ltd, Licence No. L3002382K), the publisher of PropertyInsider.sg, via JamusProperty.com. This is a separate service from our editorial research and has no influence over what we publish. See our editorial policy. Submitting this form shares your details with the advisory practice; see our privacy policy.