1. TDSR vs MSR — what each measures
Singapore's residential property loan framework has two ratios that constrain how much a borrower can borrow:
| Ratio | TDSR | MSR |
|---|---|---|
| Cap | 55% of gross monthly income | 30% of gross monthly income |
| What's included | ALL monthly debts (housing + car + cards + ...) | Housing loan only |
| Applies to | All bank property loans | HDB flats + EC from developer only |
| Effective from | 16 Dec 2021 (was 60%) | Long-standing 30% |
For HDB and EC purchases, both apply — and the lower allowance is binding. For private property, only TDSR applies.
2. The formulas
TDSR cap (monthly $) = 55% × gross monthly income − existing monthly debt
MSR cap (monthly $) = 30% × gross monthly income (HDB / EC only, mortgage only)
Binding instalment = min(TDSR cap, MSR cap if applicable)
Max loan = Binding instalment × [1 − (1+r)^−n] / r
where r = stress rate / 12, n = tenure × 12The amortization formula at the end is the standard "present value of an annuity" formula — it converts your maximum monthly affordable payment into the maximum loan principal you can borrow at the stress-test rate over the chosen tenure.
3. The medium-term interest rate (stress test)
Effective 30 September 2022, MAS raised the medium-term interest rate floor used for stress-testing TDSR and MSR:
- 4.0% per annum — for bank loans on private residential property
- 3.0% per annum — for HDB Concessionary Loans
Even if your actual mortgage rate is lower (e.g. SORA-pegged at 2.5%), the lender must compute affordability at the stress rate. This protects borrowers against rate increases over the tenure. See the stress test explainer.
4. Worked examples
Couple buying a $1.5M private condo
Combined gross monthly income: $15,000. No existing monthly debt. Bank loan, 25-year tenure, stress rate 4%.
- TDSR cap: 55% × $15,000 = $8,250/month
- MSR: not applicable for private
- Binding instalment: $8,250
- Max loan at 4% stress, 25y: $8,250 × 189.45 = $1,562,940
- However, LTV cap (75% for first home, bank) limits the loan to 75% × $1.5M = $1,125,000 — which is the actual maximum.
Same couple buying a $700K HDB resale
Bank loan, 25-year tenure, stress rate 3% for HDB.
- TDSR cap: 55% × $15,000 = $8,250/month
- MSR cap: 30% × $15,000 = $4,500/month
- Binding: MSR is lower → $4,500/month
- Max loan at 3% stress, 25y: $4,500 × 210.85 = $948,825
- LTV: 75% × $700K = $525,000 → actual maximum is LTV-binding.
🧮 Try any combination in the Loan Eligibility calculator.
5. Variable income haircut
Per MAS rules, variable income is haircut to 70% before it counts towards TDSR / MSR. "Variable" includes annual bonus, commission, freelance income, rental income, dividend income, and other non-fixed sources.
Example: a borrower with $8,000 fixed monthly salary plus a $30,000 annual bonus (= $2,500/month average) has effective income for TDSR purposes of: $8,000 + (70% × $2,500) = $9,750/month. The TDSR cap is 55% × $9,750 = $5,362.50/month.
See the dedicated Variable Income Haircut guide for treatment of specific income types.
6. TDSR vs LTV — the two-step gate
TDSR / MSR set the maximum loan your income can support. LTV (Loan-to-Value) sets the maximum loan your property can support. The actual loan offered is the lower of the two.
- First housing loan — LTV up to 75% (bank) or 80% (HDB Concessionary)
- Second housing loan — LTV up to 45% (or 25% if loan tenure causes age to exceed 65 at end)
- Third or more — LTV up to 35% (or 15% if extended tenure)
- Loan tenure extending the borrower's age past 65 further reduces LTV
For a first-time buyer with strong income, the LTV cap usually binds (you can afford more than 75% but the bank won't lend it). For multiple-property buyers or those with debt, TDSR / MSR typically binds before LTV does.