TDSR, MSR and your loan: how much can you actually borrow?

Two limits on your loan

How much you can borrow for a Singapore property is not simply "whatever the bank offers." It is shaped by regulatory limits. The two that matter most are the Total Debt Servicing Ratio (TDSR) and, for certain property types, the Mortgage Servicing Ratio (MSR). Both cap your monthly repayment as a share of your income.

TDSR - the total debt limit

TDSR limits the share of your gross monthly income that can go to all your monthly debt repayments combined - not just the new home loan, but also car loans, personal loans, credit-card minimum payments and any other property loans.

The principle: add up every monthly debt obligation, including the new mortgage you are applying for; that total cannot exceed a set percentage of your gross monthly income.

• TDSR counts all debt, not only the property loan.
• It is assessed on gross monthly income.
• Existing loans directly reduce how much property loan you can take.

The exact TDSR threshold is set by the Monetary Authority of Singapore. Confirm the current TDSR percentage with MAS or your bank before relying on it.

MSR - a stricter limit for some homes

MSR is a second, tighter cap that applies only to certain property types - principally HDB flats and Executive Condominiums bought from the developer. Where MSR applies, your property loan repayment alone cannot exceed a set share of gross monthly income - a tighter test than TDSR, and assessed on the home loan only.

For a private condominium, MSR does not apply; only TDSR does. Confirm the MSR percentage, and exactly which property types it covers, with MAS or your bank.

How the bank stress-tests your income

Banks do not calculate these ratios using today's interest rate. They apply a conservative "medium-term" stress-test rate to work out what your repayment would be if rates rose. Your TDSR and MSR are assessed against that stressed repayment - not the promotional rate you might be offered. This is why your maximum loan can feel lower than expected.

Income is also discounted in places: variable income such as bonuses, commissions and rental is typically counted only in part, and for older borrowers a shorter loan tenure raises the monthly repayment used in the test.

Loan-to-value: a separate limit

Separate from TDSR and MSR is the Loan-to-Value (LTV) limit - the maximum percentage of the property price a bank may lend. LTV depends on factors such as how many home loans you already hold and the loan tenure. Whatever LTV allows, you still have to pass TDSR, and MSR where it applies. The binding limit is whichever is lower. Confirm the current LTV limits with your bank.

What this means in practice

• Clear other debt before applying. A car loan or a large personal loan directly shrinks your property-loan headroom under TDSR.
• Get an in-principle approval early. It tells you the real number before you fall for a unit you cannot finance.
• Do not budget off the promotional interest rate. The bank tests you at a higher stressed rate; budget at that level too.
• Variable income counts for less. If much of your income is commission or bonus, expect the assessed figure to be lower than your headline earnings.

The bottom line

Your borrowing limit is the lower of what LTV allows and what TDSR - and MSR, if it applies - allows, assessed on a stress-tested repayment. The structure here is stable; the percentages are set by regulators and change from time to time. Confirm the current figures, get an in-principle approval, and a banker or licensed salesperson can model your specific numbers before you commit.