Before you fall in love with a property, the bank has already decided how much it will actually lend you. Using a TDSR calculator in Singapore before you start house hunting tells you your real borrowing limit before you sign an Option to Purchase and risk losing your deposit.
This guide explains how the calculation works, what the 55% limit means, how MSR differs from TDSR, and how to work out your own number step by step.
Quick Summary
- TDSR caps all your monthly debt obligations at 55% of gross monthly income.
- Banks stress-test your loan at 4.0% p.a. for residential property, not your actual quoted rate.
- Variable and rental income get a 30% haircut before they count toward TDSR.
- MSR (30% cap) applies only to HDB flats and ECs bought directly from a developer; TDSR also applies on top if you use a bank loan, but not for an HDB concessionary loan.
- For private property, only TDSR applies; MSR does not.
Myth vs Fact
| Myth | Fact |
|---|---|
| Banks use my actual quoted mortgage rate to assess my loan. | MAS requires banks to stress-test at 4.0% p.a. (residential) or the actual rate, whichever is higher. |
| My commission and rental income count in full. | Variable and rental income get a 30% haircut before being included in TDSR. |
| TDSR and MSR are the same thing. | TDSR caps total debt at 55% of income; MSR caps only the mortgage instalment at 30%, and applies only to HDB/EC purchases from a developer. |
| TDSR applies to every HDB purchase. | TDSR only applies if you take a bank loan for your HDB flat. An HDB concessionary loan (direct from HDB) is assessed only against the 30% MSR cap, at HDB’s own 3.0% stress-test rate. |
| Paying my credit card in full each month means it doesn’t affect TDSR. | Even fully paid cards count — banks factor in the minimum monthly payment as a debt obligation. |
What Is TDSR and Why It Matters
Total Debt Servicing Ratio Singapore rules were introduced by the Monetary Authority of Singapore (MAS) in 2013 to stop households from over-borrowing relative to income. TDSR caps how much of your gross monthly income can go toward servicing all your debts – not just the new home loan, but every other loan you carry.
The formula is:
TDSR = (All monthly debt obligations ÷ Gross monthly income) × 100 ≤ 55%
Any TDSR calculator, including IQrate’s free tool, is built around this exact formula.
TDSR 55% Limit Explained
The TDSR 55% limit explained simply: no more than 55% of your gross monthly income can go toward total debt repayments, including the new mortgage.
| Counts Toward TDSR (All Debts) | Counts Toward MSR (Mortgage Only) |
|---|---|
| New home loan instalment | New home loan instalment |
| Existing property loan instalments | – |
| Car loan repayments | – |
| Personal loan repayments | – |
| Minimum monthly credit card repayments | – |
If total obligations exceed 55% of your income, the bank cannot approve the full loan amount requested — this is a regulatory ceiling that every bank applies the same way, not a bank-specific guideline.
Using a TDSR Calculator in Singapore: Example
Learning how to calculate TDSR yourself removes the guesswork from house hunting.
| Item | Amount |
|---|---|
| Gross monthly income | $10,000 |
| Maximum debt allowed (55%) | $5,500 |
| Existing monthly car loan | $800 |
| Existing monthly credit card payment | $200 |
| Available for new home loan | $4,500 |
This calculation then works backwards from that $4,500 figure, using MAS’s 4.0% stress-test rate for residential loans, to estimate your maximum loan quantum over your chosen tenure. Even if your bank quotes 3.0%, MAS requires the loan to be stress-tested at 4.0%, so your true borrowing limit is more conservative than a simple estimate suggests.
Variable and Rental Income
If part of your income comes from commissions, bonuses, or rental, a 30% haircut applies before it’s counted. Earning $5,000 fixed salary plus $5,000 commission means the bank recognises $5,000 + (70% × $5,000) = $8,500, not the full $10,000 — a common surprise for self-employed and commission-based buyers.
TDSR vs MSR Singapore: What’s the Difference?
Understanding MSR vs TDSR Singapore rules matters most if you’re buying an HDB flat or Executive Condominium (EC) directly from a developer.
| TDSR | MSR | |
|---|---|---|
| Cap | 55% of gross monthly income | 30% of gross monthly income |
| Covers | All monthly debts | Mortgage instalment only |
| Applies to | All property types financed via a bank loan | HDB flats and ECs bought directly from developer only |
| HDB concessionary loan | Does not apply | Applies |
| Private property | Applies | Does not apply |
If you take a bank loan for an HDB flat or new EC, both ratios apply, and whichever produces the lower loan amount becomes your actual limit.
If you take a concessionary loan directly from HDB, only MSR applies — HDB assesses affordability using its own criteria rather than the TDSR framework. For private property and resale ECs past their Minimum Occupation Period, only TDSR governs eligibility – a distinction many first-time buyers overlook when comparing HDB home loan rates against private property home loan rates.
TDSR Mortgage Eligibility Singapore: Common Mistakes
❌ Forgetting to account for a car loan or personal loan when estimating affordability.
❌ Assuming rental income counts at full value.
❌ Not knowing a fully paid credit card still counts via its minimum payment.
❌ Applying for a new loan without first clearing or restructuring existing debt.
❌ Assuming the quoted mortgage rate, not the 4.0% stress-test rate, sets the loan limit.
Paying down or closing unused credit lines before applying can meaningfully improve your TDSR mortgage eligibility outcome in Singapore, since even unused credit facilities affect how much a bank is willing to lend.
Frequently Asked Questions
What is the TDSR limit in Singapore?
55% of your gross monthly income, covering all combined monthly debt obligations including the new home loan.
Does TDSR apply to HDB loans?
It depends on the loan type. TDSR applies if you take a bank loan for your HDB flat. If you take an HDB concessionary loan directly from HDB, TDSR does not apply – only the 30% MSR cap does, assessed at HDB’s own 3.0% stress-test rate rather than the bank’s 4.0%.
What interest rate is used to calculate TDSR?
Banks use the higher of your actual quoted rate or MAS’s stress-test rate, currently 4.0% p.a. for residential property loans.
Can I improve my TDSR before applying?
Yes, paying down debt, closing unused credit facilities, and pledging assets over a 48-month period can all raise your maximum loan eligibility.
Final Thoughts
Calculating your own TDSR is a useful first step, but understanding how each bank interprets your income, debts, and property type takes it further. Running your numbers through a TDSR calculator in Singapore before house hunting can save you from a rejected application – or a smaller loan offer than you expected. It’s also worth checking your numbers again whenever your income, debts, or the property price change, since even small shifts can move you across the 55% line.