TDSR Explained: How It Affects Your Mortgage Eligibility
In Singapore, the Total Debt Servicing Ratio (TDSR) is a key rule that limits how much of your gross monthly income can go towards all your loan repayments – including your home loan – to a maximum of 55%.[4] This directly determines your mortgage eligibility and how much you can borrow for a property.
This cluster article sits under Homejourney’s main mortgage eligibility pillar guide Mortgage Eligibility in Singapore: Practical Guide with Homejourney Tools and focuses specifically on “TDSR Explained: How It Affects Your Mortgage Eligibility – Frequently Asked Questions”. If you understand TDSR, you will make safer, more confident decisions when using Homejourney’s eligibility calculator and bank rates comparison tools.
Quick Definition: What Is TDSR Singapore?
In simple terms, TDSR Singapore is a framework set by the Monetary Authority of Singapore (MAS) to ensure borrowers do not take on more debt than they can reasonably afford.[4] Your TDSR is calculated as:
TDSR = (Total Monthly Debt Obligations ÷ Gross Monthly Income) × 100%[2]
From 2021, MAS tightened the TDSR limit to 55% of gross monthly income, which means all your monthly loan repayments – including the new mortgage you’re applying for – cannot exceed 55% of your gross income.[2][4] For HDB flats and Executive Condominiums, you must also meet the Mortgage Servicing Ratio (MSR) of 30% for the housing loan itself.[2][3]
How TDSR Affects Mortgage Eligibility: The Essentials
When banks like DBS, OCBC, UOB, HSBC or Standard Chartered assess your home loan through Homejourney, they must follow MAS rules on TDSR.[3][4] This is why your mortgage eligibility TDSR result on Homejourney can sometimes be lower than what you expect.
Here is how TDSR interacts with your home loan in practice:
- Maximum cap: Your total monthly debt repayment (existing loans + new mortgage) must be ≤ 55% of your gross monthly income.[4]
- All debts counted: Housing loans, car loans, study loans, renovation loans, personal loans, and credit card instalments are included.[1][2]
- Stress-tested interest rate: Banks must calculate affordability using a higher “medium-term” interest rate (typically around 4% p.a. or the prevailing rate, whichever is higher), not just today’s package rate.[2]
- Applies to all property loans: TDSR covers loans for private condos, landed homes, HDB flats and ECs from financial institutions.[2][4]
- Refinancing: Owner-occupied home refinancing has more flexibility; MAS allows exemptions from the 55% cap in certain situations, but banks still assess your credit profile.[1][2]
Homejourney’s tools are built around these MAS rules so that what you see from our eligibility calculator and bank rates page reflects real-world bank assessments, not unrealistic numbers.
Understanding the 55% TDSR Limit with Local Scenarios
To make sense of the TDSR limit 55%, it helps to look at realistic examples many Singapore buyers face – from couples buying an HDB in Punggol to investors eyeing a small condo in Geylang.
Example 1: Young Couple Buying a 4-Room HDB in Punggol
Imagine a young couple in their early 30s, both working in the CBD and living in Punggol now. They plan to buy a 4-room resale flat near Punggol MRT and Waterway Point, with price around S$650,000 – typical for newer resale units within walking distance of the MRT.
- Combined gross monthly income: S$9,000
- Existing debts: car loan S$700/month, study loan S$300/month
- No other instalments or credit card balances
First, calculate their maximum allowable debt under TDSR:
- 55% of S$9,000 = S$4,950 total monthly debt cap[2][4]
- Existing debts: S$700 + S$300 = S$1,000
- Remaining TDSR room for housing loan = S$4,950 − S$1,000 = S$3,950
However, because it is an HDB flat, the MSR 30% rule also applies.[2][3]
So even though they have S$3,950 available under TDSR, the housing instalment is capped at S$2,700 by MSR. Their actual borrowing capacity will be based on S$2,700 per month at the bank’s stress-tested interest rate and chosen tenure.
When this couple uses the Homejourney mortgage calculator , they will see that MSR, not TDSR, is their binding constraint – a frequent surprise for HDB buyers.
Example 2: Investor Buying a 1-Bedroom Condo in Geylang
Now imagine a single investor buying a 1-bedroom private condo unit in Geylang, near Aljunied MRT, at S$900,000. They plan to rent it out to tenants working in the CBD or Paya Lebar, a common strategy given the central location and transport convenience.
- Gross monthly income: S$12,000
- Existing car loan: S$1,000/month
- Small personal loan: S$500/month
TDSR calculation:
- 55% of S$12,000 = S$6,600 maximum total monthly debt[2][4]
- Existing debt = S$1,000 + S$500 = S$1,500
- Maximum monthly mortgage instalment = S$6,600 − S$1,500 = S$5,100
There is no MSR for private property, so the bank calculates the maximum loan such that the monthly instalment at stress-tested interest (e.g. 4% p.a. over 30 years) does not exceed S$5,100.[2][3]
You can plug these numbers into Homejourney’s eligibility calculator at the bank rates page Bank Rates to see the estimated loan ceiling and how different loan tenures or rate types change your affordability.
Key Components of TDSR & MSR in Singapore
To make smarter decisions, it helps to break down total debt servicing ratio and MSR into their building blocks – income, age, tenure and credit profile.
1. Income Requirements: Employed vs Self-Employed
For TDSR, banks consider your gross monthly income, which typically includes salary and documented variable income such as bonuses, commissions and rental income.[2][3] However, variable income is usually discounted (e.g. 30%) to account for fluctuations.
- Employees: Banks will look at the latest 3–12 months’ payslips and CPF contributions, plus your income tax Notice of Assessment.
- Self-employed / commission-based: Typically assessed using the last 2 years’ Notice of Assessment, with haircuts applied to stabilise income for TDSR purposes.
On Homejourney, if you apply via Singpass/MyInfo from the bank-rates page Bank Rates , your income data can be pulled securely and accurately from government records, reducing errors that might affect your TDSR calculation and eligibility.
2. Age and Loan Tenure Limits
Your age affects how long a loan tenure you can take, which in turn affects your monthly instalment and TDSR. MAS generally caps loan tenures at 35 years for housing loans, and there are additional rules when the loan period goes beyond age 65.
For example, a 30-year-old buying a resale flat in Tampines can typically take a 25- or 30-year tenure, which lowers monthly instalments and keeps TDSR comfortable. A 49-year-old buying a similar unit will likely be offered a shorter tenure, which pushes monthly instalments up and may cause TDSR to be the limiting factor.
3. Credit Score & Debt Behaviour
Your credit report from the Credit Bureau Singapore is another critical piece. Even if your TDSR fits within 55%, banks can still decline or reduce the loan if they see frequent late payments, high utilisation of credit limits, or multiple unsecured loans.
Practical local tip from experience: if you consistently roll over credit card balances or use instalment plans from major retailers in malls like VivoCity, Junction 8 or Northpoint City, these will show up as obligations and eat into your TDSR room. Clearing or consolidating them before your home loan application can meaningfully improve eligibility.
TDSR Calculation Examples: Income vs Borrowing Capacity
Below is a simplified illustration of how different income levels translate into maximum monthly debt allowances under the 55% total debt servicing ratio limit. Actual borrowing power will depend on interest rates, loan tenure and your existing debts.
These numbers match the principles from MAS and bank explanations: TDSR at 55%, MSR at 30% for HDB/EC.[2][3][4] Homejourney’s mortgage calculator uses similar logic, then layers on real-time interest rate data from partner banks to estimate the actual loan amount.
Interest Rates, SORA & Their Role in TDSR
While TDSR uses a stress-test rate rather than your package rate, understanding interest trends in Singapore – especially SORA (Singapore Overnight Rate Average) – helps you plan your borrowing and refinancing decisions. Most floating-rate packages from DBS, OCBC, UOB, HSBC and other banks today are pegged to SORA, plus a fixed spread.
The chart below shows recent interest rate trends in Singapore:
As rates rise, banks’ medium-term interest rate floor (often around 4% p.a. or higher) used in TDSR/MSR calculations can also be adjusted, effectively reducing your maximum borrowing capacity even if your income stays the same.[2] Homejourney offers real-time SORA tracking within our tools so you can see how rate movements might affect your affordability before you lock in a loan.
How to Improve Your Mortgage Eligibility Under TDSR
If your mortgage eligibility TDSR result is lower than you hoped, there are practical steps you can take – many of which Singapore buyers use when upgrading from an HDB in Sengkang to a condo in Hougang or Serangoon.
1. Reduce Existing Debts Before Applying
Because TDSR counts every monthly loan repayment, reducing or clearing non-essential debts can significantly increase your available room for a housing loan.[1][2]
- Pay off credit card balances and instalments from electronics or furniture purchases.
- Clear or reduce personal loans where possible.
- Consider settling small car loans if you are close to the end of the tenure.
Insider tip: Many upgraders we have worked with time their condo purchase after their COE loan drops below one or two years outstanding, which lowers the monthly repayment enough to noticeably improve their TDSR room.
2. Increase Documented Income
If you are self-employed, in sales, or working in F&B, retail or gig roles around Orchard, Bugis or Jurong, you may have high cash income but low documented income. Since banks must rely on official documents, make sure you:
- Declare your income properly in your annual tax returns.
- Maintain consistent CPF contributions where applicable.
- Keep at least 2 years of stable, traceable income records.
