TDSR Explained: Boost Mortgage Eligibility & Approval Odds | Homejourney
The Total Debt Servicing Ratio (TDSR) limits your total monthly debt payments to 55% of your gross monthly income, directly determining your mortgage eligibility in Singapore. Understanding TDSR calculation and the TDSR limit 55% helps you maximize borrowing power and improve approval chances from banks like DBS, OCBC, and UOB.
This cluster article dives into TDSR Singapore specifics, building on our pillar guide to Singapore mortgage eligibility. At Homejourney, we prioritize your safety with transparent tools like our eligibility calculator at https://www.homejourney.sg/bank-rates#calculator, ensuring confident decisions in a trusted environment.
What is TDSR and Why Does It Matter for Mortgage Eligibility?
Introduced by the Monetary Authority of Singapore (MAS) in 2013, TDSR prevents over-borrowing amid high property prices. It caps all debts—including mortgages, car loans, credit cards—at 55% of gross monthly income.[1][5]
For housing loans, banks apply a minimum 4% interest rate stress test for conservatism, even if current rates are lower. This ensures resilience against rate hikes. TDSR Singapore applies to all residential properties, unlike MSR (30% limit for HDB/EC only).[1][3]
Homejourney's platform verifies your mortgage eligibility TDSR instantly via Singpass integration, auto-filling income data for accurate assessments. This transparency builds trust, helping first-time buyers and upgraders avoid surprises.
How TDSR Calculation Works: Step-by-Step Breakdown
TDSR calculation = (Total monthly debt obligations / Gross monthly income) × 100. It must stay ≤55%.[1][5]
- Gross Monthly Income: Pre-tax salary, excluding employer CPF. Variable income (bonuses, commissions) gets a 30% haircut, averaged over 12 months. Rental income requires a tenancy agreement with 6+ months validity, also haircut-adjusted.[1]
- Total Debt Obligations: All repayments: existing loans, new mortgage (at 4% stress rate), credit cards (minimum payments), car/student loans.[1]
- Stress Test: Mortgage computed at medium-term rate (≥4%).
Example: A couple earns S$10,000/month (fixed S$8,000 + variable S$2,000 haircut to S$1,400). Debts: S$2,000 existing + new mortgage. Max new mortgage payment: (S$9,400 × 0.55) - S$2,000 = S$1,670.
TDSR vs MSR: Key Differences for HDB Buyers
MSR limits HDB/EC mortgages to 30% of income; TDSR covers all debts at 55%. Both apply—meet the stricter one. Use Homejourney's calculator to check both at https://www.homejourney.sg/bank-rates#calculator.[3]
| Rule | Limit | Applies To |
|---|---|---|
| TDSR | 55% | All debts, all properties |
| MSR | 30% | HDB/EC mortgages only |
This table shows why TDSR often binds private property buyers more tightly.[1][3]
Real-World TDSR Examples: Income vs Borrowing Power
Scenario 1: Single buyer, S$6,000 income, no debts. Max total debt: S$3,300 (55%). At 4% over 25 years, borrows ~S$570,000 (75% LTV).[2]
Scenario 2: Couple, S$12,000 combined (post-haircut S$10,500), S$1,500 car loan. Max new mortgage payment: (S$10,500 × 0.55) - S$1,500 = S$2,275. Borrows ~S$980,000.
For HDB upgraders from Punggol resale flat (S$700,000 value), remaining loan reduces headroom. Homejourney's tool at https://www.homejourney.sg/bank-rates simulates these precisely.[3]
Insider tip: Self-employed? Banks average 24 months income with 30-50% haircut—gather IR8As early.
7 Actionable Ways to Improve TDSR and Approval Chances
Boost mortgage eligibility by optimizing TDSR. Follow these steps:
- Pay Down Debts: Clear credit cards/car loans first—minimum payments inflate TDSR.[1]
- Reduce Variable Income Reliance: Build 12 months stable fixed income proof.
- Time Bonuses: Delay non-essential loans until after bonus cycles for higher averages.
- Include Assets: Eligible investments (haircut over 48 months) count as income.[1]
- Joint Applications: Combine incomes (income-weighted age for tenure).
- Shorten Tenure: Lower payments fit under 55% (max 65-30/75 years).[2]
- Refinance Existing Loans: Lock lower rates via Homejourney's multi-bank submission.
Start with Homejourney: Compare DBS, OCBC, UOB, HSBC rates at https://www.homejourney.sg/bank-rates. Submit one app via Singpass—get offers from 10+ banks fast.
Pro tip: For Tengah EC buyers, factor MSR alongside TDSR; our Projects Directory analyzes project affordability.
Using Homejourney to Navigate TDSR Safely
Homejourney creates a trusted space with verified tools. Calculate TDSR/MSR impact instantly—no manual math. Track SORA trends for timing: Submit to partners like Standard Chartered when rates dip.
Apply once, hear from DBS, OCBC, UOB, HSBC, Maybank, CIMB—personalized via our brokers. Link budgets to properties at https://www.homejourney.sg/search. Post-purchase, maintain value with Aircon Services .
Disclaimer: This is educational; consult professionals. Rules per MAS June 2022 (55% TDSR).[5] See related: TDSR Singapore Explained: How It Limits Your Mortgage Eligibility | Homejourney
FAQ: TDSR Singapore Common Questions
Q: What is the TDSR limit in Singapore?
A: 55% of gross income for all debts, per MAS.[1][5]
Q: Does TDSR apply to refinancing?
A: Yes, full recalculation including new terms.[1]
Q: How does variable income affect TDSR?
A: 30% haircut on 12-month average.[1]
Q: Can I exceed TDSR for private properties?
A: No, mandatory for all banks.[5]
Q: How to check TDSR before applying?
A: Use Homejourney's free calculator at https://www.homejourney.sg/bank-rates#calculator.
Ready to improve your approval chances? Visit https://www.homejourney.sg/bank-rates for TDSR-optimized loans. Explore our pillar on Singapore Mortgage Eligibility for full coverage.
