MSR Guide for HDB and EC Buyers: Calculate Your Mortgage Eligibility

The Mortgage Servicing Ratio (MSR) is one of the most critical factors determining how much you can borrow when purchasing an HDB flat or Executive Condominium (EC) in Singapore. Understanding MSR—and how it differs from TDSR—can mean the difference between securing your dream property or facing loan rejection. This comprehensive guide from Homejourney explains everything you need to know about MSR limits, calculations, and how to optimize your borrowing capacity.

Table of Contents

• What is MSR? Understanding the 30% Limit
• MSR vs TDSR: Key Differences Explained
• MSR Rules for HDB and EC Buyers
• How to Calculate Your MSR
• Real-World MSR Calculation Examples
• How to Improve Your MSR Position
• Common MSR Mistakes to Avoid
• Using Homejourney's Tools to Optimize Your Eligibility
• Frequently Asked Questions About MSR
• Next Steps: Your Path to Homeownership

What is MSR? Understanding the 30% Limit

MSR (Mortgage Servicing Ratio) is the percentage of your gross monthly income that goes toward servicing your mortgage payment alone. For HDB and EC purchases, the maximum MSR limit is 30%—meaning your monthly mortgage payment cannot exceed 30% of your gross monthly income.

This 30% threshold is set by HDB and applies to all HDB flat purchases and EC purchases using HDB loans. It's a protective measure designed to ensure borrowers don't overextend themselves financially and can comfortably meet their mortgage obligations.

For example, if your gross monthly income is SGD 5,000, your maximum monthly mortgage payment would be SGD 1,500 (30% of SGD 5,000). This means your loan amount would be calculated backwards from this monthly payment limit, factoring in interest rates and loan tenure.

MSR vs TDSR: Key Differences Explained

Many first-time buyers confuse MSR with TDSR (Total Debt Servicing Ratio), but they serve different purposes and apply in different scenarios. Understanding the distinction is crucial for accurate financial planning.

The key insight: MSR is stricter than TDSR because it only allows 30% of your income for the mortgage itself, whereas TDSR permits 55% for all debts combined. This means when buying an HDB flat or EC with an HDB loan, your borrowing capacity is more constrained.

However, if you're buying an EC with a bank loan (not an HDB loan), TDSR applies instead, potentially allowing you to borrow more. This is one reason some buyers choose ECs over HDB flats—the financing flexibility.

MSR Rules for HDB and EC Buyers

HDB Flat Purchases

When purchasing an HDB flat, you must comply with MSR requirements if you're using an HDB loan. The 30% MSR limit applies to all HDB buyers regardless of whether it's your first property or a subsequent purchase.

HDB loans are specifically designed for HDB flat purchases and come with strict affordability requirements. The MSR calculation is straightforward: your monthly mortgage payment cannot exceed 30% of your gross monthly household income.

Executive Condominium (EC) Purchases with HDB Loans

ECs are a hybrid property type—they're developed by HDB but offer condominium-style amenities. When buying an EC with an HDB loan (which is the primary financing option for ECs), the same 30% MSR limit applies.[1]

This is important because many EC buyers assume they have more borrowing flexibility than HDB flat buyers. In reality, from a financing perspective, they're subject to identical MSR constraints when using HDB loans.

Executive Condominium (EC) Purchases with Bank Loans

Some EC buyers choose to finance their purchase through commercial banks instead of HDB. In these cases, TDSR applies instead of MSR, and the maximum debt servicing ratio is 55%.[3]

This is a significant distinction. With TDSR, you may qualify for a larger loan amount, but you must factor in all existing debts. Bank loans for ECs also typically come with higher interest rates than HDB loans and may require larger down payments.

How to Calculate Your MSR

Calculating your MSR is straightforward once you understand the formula. Here's the step-by-step process:

1. Determine your gross monthly household income: This includes salary, bonuses, allowances, and other regular income sources. For self-employed individuals, use your average income over the past 2 years.
2. Calculate 30% of your gross monthly income: This is your maximum allowable monthly mortgage payment.
3. Work backwards to determine maximum loan amount: Using current interest rates and your desired loan tenure, calculate what loan amount would result in a monthly payment equal to 30% of your income.

MSR Formula:

Monthly Mortgage Payment ÷ Gross Monthly Income = MSR Ratio

Maximum Monthly Mortgage Payment = Gross Monthly Income × 30%

For example, if your gross monthly income is SGD 6,000:

Maximum Monthly Mortgage Payment = SGD 6,000 × 30% = SGD 1,800

Your monthly mortgage payment cannot exceed SGD 1,800. Using current interest rates (approximately 3.5% for HDB loans as of January 2026), a 25-year loan tenure, and a monthly payment of SGD 1,800, you could borrow approximately SGD 550,000.

Pro Tip: Use Homejourney's mortgage eligibility calculator to instantly determine your maximum borrowing capacity based on your income, existing debts, and desired loan tenure. The calculator factors in current interest rates and automatically applies MSR limits for HDB and EC purchases. Bank Rates

Real-World MSR Calculation Examples

Let's walk through several realistic scenarios to show how MSR affects your borrowing capacity in different situations.

Scenario 1: Single First-Time Buyer, Employed

Profile: 28-year-old single, gross monthly income SGD 5,500, no existing debts, purchasing a 3-room HDB flat.

Calculation:

• Gross Monthly Income: SGD 5,500
• Maximum Monthly Mortgage Payment (30% MSR): SGD 5,500 × 30% = SGD 1,650
• Assumed Interest Rate: 3.5% p.a.
• Loan Tenure: 25 years (300 months)
• Maximum Loan Amount: Approximately SGD 505,000

Property Scenario: If purchasing a 3-room HDB flat priced at SGD 450,000 with a 10% down payment (SGD 45,000), you would need to borrow SGD 405,000. Your monthly mortgage payment would be approximately SGD 1,220, which is well within your 30% MSR limit (SGD 1,650).

Scenario 2: Married Couple, Dual Income

Profile: Married couple, combined gross monthly income SGD 12,000 (SGD 6,000 each), no existing debts, purchasing a 4-room HDB flat.

Calculation:

• Combined Gross Monthly Income: SGD 12,000
• Maximum Monthly Mortgage Payment (30% MSR): SGD 12,000 × 30% = SGD 3,600
• Assumed Interest Rate: 3.5% p.a.
• Loan Tenure: 25 years
• Maximum Loan Amount: Approximately SGD 1,100,000

Property Scenario: A 4-room HDB flat priced at SGD 550,000 with a 10% down payment (SGD 55,000) requires a loan of SGD 495,000. Monthly payment would be approximately SGD 1,490, comfortably within the SGD 3,600 limit.

Scenario 3: EC Purchase with Bank Loan (TDSR Applies)

Profile: 35-year-old buyer, gross monthly income SGD 8,000, existing car loan payment SGD 400/month, purchasing an EC with a bank loan.

Calculation:

• Gross Monthly Income: SGD 8,000
• Existing Debt Payments: SGD 400 (car loan)
• Maximum Total Debt Servicing (55% TDSR): SGD 8,000 × 55% = SGD 4,400
• Available for Mortgage: SGD 4,400 - SGD 400 = SGD 4,000
• Assumed Interest Rate: 3.8% p.a. (bank loan, slightly higher than HDB)
• Loan Tenure: 25 years
• Maximum Loan Amount: Approximately SGD 1,200,000

Key Difference: With TDSR instead of MSR, this buyer has significantly more borrowing capacity (SGD 1,200,000 vs. approximately SGD 960,000 if MSR applied). However, this assumes the car loan is factored in, reducing available capacity.

Scenario 4: Self-Employed Professional

Profile: 40-year-old self-employed consultant, average annual income SGD 120,000 (SGD 10,000/month), no existing debts, purchasing a 5-room HDB flat.

Calculation:

• Average Gross Monthly Income: SGD 10,000
• Maximum Monthly Mortgage Payment (30% MSR): SGD 10,000 × 30% = SGD 3,000
• Assumed Interest Rate: 3.5% p.a.
• Loan Tenure: 20 years (shorter tenure due to age)
• Maximum Loan Amount: Approximately SGD 850,000

Documentation Note: Self-employed buyers must provide 2 years of audited accounts or tax returns to verify income. HDB will use the average of the 2-year period for income calculation.

How to Improve Your MSR Position

If your current MSR calculation shows you can't borrow enough for your target property, several strategies can improve your position:

1. Increase Your Income

The most direct way to improve MSR is to increase your gross monthly income. Strategies include:

• Seek a promotion or salary increase: Even a 10% salary increase significantly improves your borrowing capacity. A SGD 5,000 monthly income increased to SGD 5,500 raises your maximum monthly mortgage payment from SGD 1,500 to SGD 1,650.
• Change jobs to a higher-paying role: If you're planning to buy within 6-12 months, securing a higher-paying position now will strengthen your application.
• Add a co-borrower: If you're single, getting married or adding a family member as a co-borrower increases combined household income and MSR capacity.

2. Reduce Existing Debt Obligations

While MSR only considers the mortgage payment itself, reducing other debts improves your financial profile and may help with bank approval:

• Pay off credit card balances: Clear high-interest debt before applying for a mortgage.
• Settle personal loans: Reducing existing loan obligations frees up cash flow.
• Pay down car loans: If possible, pay off or significantly reduce car loan balances.

3. Extend Your Loan Tenure

A longer loan tenure reduces your monthly payment, improving your MSR ratio:

• 25-year vs. 20-year loan: Extending from 20 to 25 years reduces monthly payments by approximately 15-20%, allowing you to borrow more.
• Maximum tenure: HDB allows loan tenures up to 25 years for most buyers. Some buyers over 55 may have shorter maximum tenures.
• Trade-off: Longer tenures mean higher total interest paid over the life of the loan.

4. Save a Larger Down Payment

While this doesn't directly improve MSR, a larger down payment reduces the loan amount needed:

• Standard down payment: HDB typically requires 10% down payment.
• Larger down payment: Saving 15-20% down payment reduces your loan amount and monthly payment, making it easier to stay within MSR limits.

5. Optimize Your Application Timing

Strategic timing can improve your MSR position:

• Wait for interest rate drops: If interest rates decline, your monthly payment for the same loan amount decreases, improving your MSR ratio.
• Bonus season timing: If your income includes annual bonuses, apply after receiving them to reflect higher average income.
• Promotion timing: Wait until a promotion is finalized and reflected in your payslips before applying.

Homejourney Insight: Use Homejourney's bank rates page to monitor current interest rates. When rates drop, refinancing or accelerating your purchase timeline can significantly improve your borrowing capacity. Bank Rates

Common MSR Mistakes to Avoid

Mistake 1: Confusing MSR with TDSR

Many buyers assume MSR and TDSR are the same, leading to incorrect borrowing capacity estimates. Remember: MSR (30%) applies to HDB and EC purchases with HDB loans, while TDSR (55%) applies to private property bank loans.

Mistake 2: Not Accounting for Interest Rate Changes

If you calculate your borrowing capacity based on current rates but rates increase before you apply, your actual monthly payment may exceed your MSR limit. Build in a buffer by calculating based on rates 0.5-1% higher than current rates.

Mistake 3: Including Variable Income Without Verification

Bonuses, commissions, and overtime are often not fully counted toward income for mortgage purposes. HDB typically requires 2 years of history for variable income and may only count a percentage of it. Assume conservatively when calculating.

Mistake 4: Forgetting CPF Contribution Deductions

Your gross income for MSR purposes is your salary before CPF contributions. However, your CPF balance must be sufficient to cover the down payment and stamp fees. Many buyers forget this crucial distinction.

Mistake 5: Applying Immediately After Job Changes

HDB typically requires 6 months of employment history in your current role. Applying too soon after a job change—even to a higher-paying position—may result in the lower income being used for calculations.

Mistake 6: Not Considering Age and Maximum Loan Tenure

Your age affects your maximum loan tenure. Buyers over 55 have shorter maximum tenures, resulting in higher monthly payments and lower borrowing capacity. Plan accordingly if you're applying later in your career.

Using Homejourney's Tools to Optimize Your Eligibility

Homejourney has built comprehensive tools specifically designed to help buyers understand and optimize their MSR position. Here's how to use them effectively:

Homejourney Mortgage Eligibility Calculator

Our eligibility calculator instantly shows your maximum borrowing capacity based on your income, existing debts, and desired loan parameters. The calculator:

• Automatically applies 30% MSR limits for HDB and EC purchases
• Factors in current interest rates from all major banks
• Allows you to adjust loan tenure to see impact on monthly payments
• Shows your exact monthly payment and remaining income after mortgage
• Provides a clear breakdown of how MSR affects your borrowing power

Access the calculator at: Bank Rates

Homejourney Bank Rates Comparison

Compare current mortgage rates from all major banks including DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, and more. The comparison tool shows:

• Current rates for HDB and EC loans
• Fixed vs. SORA rates side-by-side
• Processing fees and lock-in periods
• Estimated monthly payments for your loan amount

Different banks may offer different rates based on your profile. Comparing across banks can save thousands of dollars over your loan tenure. Bank Rates

Homejourney Property Search with Affordability Filter

Once you've determined your maximum borrowing capacity, use Homejourney's property search to find properties within your budget. Filter by:

• Maximum price based on your borrowing capacity
• Property type (HDB, EC)
• Location and MRT proximity
• Unit size and layout

Access the search at: Property Search

Homejourney Multi-Bank Loan Application

Once you've found your property, submit one application through Homejourney to receive offers from multiple banks simultaneously. Our process:

• Single application: Fill out your details once
• Singpass integration: Auto-fill employment and income data for faster processing
• Multiple offers: Receive competing offers from DBS, OCBC, UOB, HSBC, Standard Chartered, and other banks
• Personalized guidance: Our mortgage brokers provide expert advice on comparing offers and optimizing your loan terms

Apply now at: Bank Rates

Real-Time Interest Rate Tracking

Stay informed about SORA (Singapore Overnight Rate Average) and how it affects your mortgage. Homejourney tracks:

• 3M SORA and 6M SORA rates in real-time
• Historical rate trends to help you time your purchase
• Rate forecasts from market experts
• Impact of rate changes on your monthly payment

Monitor rates at: Bank Rates

Frequently Asked Questions About MSR

Q1: What is the difference between MSR and TDSR?

A: MSR (Mortgage Servicing Ratio) measures only your mortgage payment as a percentage of income, with a 30% limit for HDB and EC purchases. TDSR (Total Debt Servicing Ratio) includes all debts (mortgage, car loans, credit cards, personal loans) with a 55% limit for private property bank loans. MSR is stricter, limiting your borrowing capacity for HDB/EC purchases.

Q2: Does MSR apply when buying an EC with a bank loan?

A: No. When buying an EC with a bank loan (not an HDB loan), TDSR applies instead of MSR. This allows up to 55% of your income for all debt servicing, potentially increasing your borrowing capacity. However, bank loans typically come with higher interest rates than HDB loans.

Q3: How is income calculated for MSR purposes?

A: Gross monthly income includes salary, allowances, and regular bonuses. For self-employed individuals, HDB uses the average income over the past 2 years. Variable income (commissions, overtime) may only be partially counted. CPF contributions are not deducted from gross income for MSR calculations.

Q4: Can I improve my MSR by adding a co-borrower?

A: Yes. Adding a spouse or family member as a co-borrower increases your combined household income, which directly improves your MSR position. For example, if you earn SGD 5,000 and your spouse earns SGD 6,000, your combined income is SGD 11,000, allowing a maximum monthly mortgage payment of SGD 3,300 (30% of SGD 11,000).

Q5: What happens if my income fluctuates?

A: For self-employed individuals or those with variable income, HDB uses a 2-year average. This protects you if income is temporarily high or low. However, if your income has been declining, HDB may use a more conservative figure. Ensure your income is stable or trending upward when applying.

Q6: Does existing debt affect my MSR limit?

A: For HDB loans, MSR only considers your mortgage payment, not existing debts. However, banks may still consider your total debt obligations when approving your loan. It's wise to pay down existing debts before applying to strengthen your overall financial profile.

Q7: Can I borrow more by extending my loan tenure?

A: Yes. A longer loan tenure reduces your monthly payment, allowing you to borrow more while staying within the 30% MSR limit. For example, extending from 20 to 25 years might allow you to borrow an additional SGD 100,000-150,000. However, you'll pay more interest over the life of the loan.

Q8: What's the maximum loan tenure for HDB and EC purchases?

A: The standard maximum loan tenure is 25 years. However, for buyers over 55, the maximum tenure may be shorter to ensure the loan is repaid by age 65 or 70, depending on HDB's guidelines at the time of application.

Q9: How do interest rate changes affect my MSR calculation?

A: Your MSR is based on your actual monthly payment, which depends on current interest rates. If rates increase after you apply, your monthly payment may increase, potentially pushing you over the 30% MSR limit. This is why banks often require rate lock-in periods. When calculating your borrowing capacity, assume rates could be 0.5-1% higher than current rates.

Q10: Can I use projected future income for MSR calculations?

A: Generally, no. HDB and banks require documented current income. However, if you have a confirmed promotion or job offer with a start date within 3-6 months, you may be able to use the higher income in some cases. Speak with your bank or HDB officer about your specific situation.

Q11: What if I fail the MSR test?

A: If you fail MSR, you have several options: (1) Increase your income, (2) Reduce the loan amount by saving a larger down payment, (3) Extend your loan tenure, (4) Add a co-borrower, or (5) Consider a less expensive property. Use Homejourney's eligibility calculator to explore these scenarios.

Q12: Does MSR apply to HDB resale flats?

A: Yes. Whether buying a new HDB flat (BTO) or a resale HDB flat, the 30% MSR limit applies when using an HDB loan. The calculation and requirements are identical.

Q13: Can I refinance to improve my MSR situation?

A: Refinancing doesn't change your MSR; it only changes the bank providing your loan. However, refinancing to a lower interest rate reduces your monthly payment, which improves your cash flow. If you're considering buying an additional property, refinancing your current property to a lower rate can free up income for the new MSR calculation.

Q14: How does CPF withdrawal affect MSR?

A: Your CPF can be used for down payments, stamp fees, and legal fees. Using CPF reduces the loan amount needed, which lowers your monthly payment and improves your MSR position. However, you must have sufficient CPF balance. Your CPF contribution is not deducted from gross income for MSR purposes.

Q15: What if my spouse has poor credit?

A:

References

1. Singapore Property Market Analysis 1 (2026)
2. Singapore Property Market Analysis 3 (2026)