The total debt servicing ratio (TDSR) in Singapore limits your total monthly debt repayments, including your home loan, to no more than 55% of your gross monthly income.[4] If your TDSR exceeds this 55% limit, banks are generally not allowed to approve your mortgage, so understanding and managing TDSR is critical to improving your approval chances.[2][4]
This article is a focused cluster guide under Homejourney’s broader mortgage eligibility pillar content, complementing resources like How Much Can You Borrow? TDSR Singapore Explained with Real Examples | Homejourn... and Mortgage Eligibility in Singapore: Practical Guide with Homejourney Tools . Here we zoom in specifically on “TDSR Explained How It Affects Your Mortgage Eligibility: How to Improve Approval Chances” for Singapore buyers and investors.
What Is TDSR in Singapore? (Quick Definition)
Total Debt Servicing Ratio (TDSR) is a rule set by the Monetary Authority of Singapore (MAS) that caps your total monthly debt repayments at 55% of your gross monthly income when you take a property loan.[2][4] It applies to all new property loans from financial institutions, regardless of whether the property is HDB, EC or private.[2][4]
In formula form:
TDSR = (Total Monthly Debt Obligations ÷ Gross Monthly Income) × 100%[2]
Total monthly debt obligations include:
- All existing home loans (if any)
- New property loan you are applying for
- Car loans and motorcycle loans
- Credit card and personal loan repayments
- Renovation, education and business term loans
- Any other secured or unsecured instalment debts
MAS tightened the TDSR limit from 60% to 55% in December 2021 as part of ongoing cooling measures, and this 55% limit remains in force today.[2][4] DBS, for example, explicitly states that with your home loan, your TDSR “cannot exceed 55% of your gross monthly income”.[3]
How TDSR Affects Your Mortgage Eligibility in Practice
When you apply for a bank home loan in Singapore, your eligibility is determined by several factors: Loan-to-Value (LTV), TDSR, and, if you are buying an HDB or EC, the Mortgage Servicing Ratio (MSR).[3] TDSR is the key cap on your total debt level, while MSR caps only your housing instalments for HDB and EC purchases.[2][3]
For private property loans, banks primarily assess:
- LTV – typically up to 75% of property value, subject to age and existing loans[3]
- TDSR 55% limit – your total debt, including the new mortgage, must be ≤55% of your gross monthly income[2][3][4]
For HDB or EC loans from banks, you must pass both:
- MSR ≤ 30% of your gross monthly income (for HDB/EC loans)[1][2][3]
- TDSR ≤ 55% (for all property loans)[2][3][4]
HDB loans directly from HDB are subject to MSR and HDB’s own rules, but not the MAS TDSR framework.[2][4]
How Banks Calculate TDSR (Including MAS Stress Test)
Under MAS rules, banks must calculate TDSR using a “medium-term interest rate floor” to stress test your affordability, not just the headline promotional rate.[2][4] Since 30 September 2022, MAS has raised these interest rate floors, and banks commonly use around 4% p.a. or higher for TDSR calculations, even if the package you see is lower.[2]
That means your assessed monthly instalment for TDSR purposes may be significantly higher than what you expect from an online loan calculator that uses current promo rates. This is especially noticeable in mature estates like Queenstown or Bishan, where a 3‑bedder resale condo can be in the $1.6M–$2M range, and a small difference in assessed interest rate can tip you above the 55% TDSR cap if your income is borderline.
Based on MAS’ official explainer, the bank will compute TDSR using:[4]
- Gross monthly income (fixed + eligible variable income, averaged)
- Total monthly debt obligations (property + non-property loans)[2][4]
- Stressed interest rate and maximum tenure
This is why two buyers both earning $8,000/month may have very different loan eligibility if one already has a car loan and personal loan, and the other has no debts.
Real TDSR Calculation Examples (Singapore Scenarios)
Example 1: Single Buyer, Private Condo in Punggol
Imagine you are looking at a 2‑bedroom private condo in Punggol near Waterway Point and Punggol MRT, priced at $1.2M. You earn a fixed salary of $7,000/month with no other debts.
Assume:
- LTV of 75% → Loan amount = 0.75 × $1,200,000 = $900,000
- Loan tenure: 25 years
- Stress test rate: 4% p.a.
Approximate monthly instalment at 4% over 25 years is around $4,750 (for illustration).
Your TDSR is:
TDSR = $4,750 ÷ $7,000 × 100% ≈ 67.9%
This exceeds the 55% TDSR limit, so the bank will not grant the full $900,000 loan. They will either reduce the loan amount, shorten the tenure less than you want, or you must increase your downpayment or buy a cheaper unit.
Example 2: Same Buyer, Smaller Loan or Higher Income
If you increase your income to $9,000/month (for instance, after a promotion) with the same $4,750 monthly instalment:
TDSR = $4,750 ÷ $9,000 × 100% ≈ 52.8%
Now you are within the 55% TDSR limit, so the loan becomes potentially approvable (still subject to credit assessment and LTV rules).[3][4]
Example 3: HDB/EC Buyer – MSR + TDSR
Consider a couple buying a 4‑room BTO in Tengah or a new EC in Sengkang. Combined income: $8,000/month. They have no other loans.
- MSR 30% → Max housing instalment = 0.30 × $8,000 = $2,400
- TDSR 55% → Max total debt instalment = 0.55 × $8,000 = $4,400
Because they have no other loans, the binding cap is MSR ($2,400) for HDB/EC purchases. Even though TDSR allows up to $4,400 for all debts, their HDB/EC housing instalment cannot exceed $2,400/month.[1][2]
Sample Income vs Max Total Monthly Debt (TDSR 55%)
Remember: this cap must include all your loans – housing, car, personal, renovation, etc.[2][3]
Other Key Eligibility Factors Linked to TDSR
Income Type and Stability
Banks differentiate between fixed salaried employees and those with variable or self-employed income. Self-employed (e.g. Grab driver, freelance designer, property investor with rental income) may see a haircut applied to their declared income when calculating TDSR, lowering borrowing capacity.
From first-hand experience working with buyers in areas like Punggol, Sengkang and Jurong West, many self-employed clients are surprised that banks only take, say, 70% of their average income over the past 12 months (varies by bank policy), which can significantly reduce the allowed monthly instalment under the 55% TDSR cap.
Age and Loan Tenure
Your age plus tenure cannot exceed MAS’s maximum tenure limits for housing loans (usually up to 30 years for HDB and 35 years for private property, depending on age and property type). Shorter tenure means higher monthly instalments, which can push TDSR higher even if the loan amount is the same.
For example, a 49‑year‑old upgrader in Tampines moving from a 4‑room HDB to a 3‑bedroom EC will often be capped at a shorter tenure than a buyer in their early 30s, so TDSR becomes a tighter constraint.
Credit Score and Existing Debts
MAS’ framework works alongside credit bureau checks, which reflect your repayment history, utilisation and past defaults.[1][2] Even if your TDSR is below 55%, poor credit conduct may lead to lower approved loan quantum or outright rejection, particularly with larger loans for central areas like Novena, Tiong Bahru or the CBD fringe.
How to Improve Your Mortgage Approval Chances Under TDSR
1. Clear or Reduce High-Interest Debts First
Because TDSR counts all monthly repayments, even a few hundred dollars on credit cards or personal loans can materially reduce your borrowing power.[1][2] Before applying for a mortgage:
- Pay down credit card balances and consider cancelling unused cards
- Consolidate or repay personal loans where feasible
- Avoid taking new hire-purchase loans (e.g. car, furniture) before your property purchase
In practice, I often see East-side buyers (Bedok, Pasir Ris) gain an extra $100,000–$150,000 in loan eligibility simply by clearing a car loan and one personal loan before submitting their application.
2. Optimise Your Property Budget and Location
If your TDSR is borderline, consider:
- Choosing a slightly lower quantum property (e.g. 3‑room instead of 4‑room, or city-fringe instead of CCR)
- Looking at emerging towns like Tengah, Woodlands or Sengkang, where prices may be more manageable than central estates
- Exploring older resale units in mature estates, which can be cheaper than new launches nearby
Use Homejourney’s property search tool Property Search to filter homes by price and estimated monthly instalments so you stay safely within the 55% TDSR limit.
3. Adjust Tenure Thoughtfully
Longer loan tenures reduce monthly instalments and can pull your TDSR below 55%, though you pay more interest overall. For some buyers in Choa Chu Kang or Punggol upgrading from 4‑room to 5‑room flats, extending tenure from 20 to 25 years has made the difference between rejection and approval, while still planning to make partial prepayments later when income rises.
Homejourney’s eligibility calculator at https://www.homejourney.sg/bank-rates#calculator lets you test different tenures and loan amounts instantly and see how your TDSR and MSR change.
4. Increase Household Income (Safely and Transparently)
Because TDSR is a ratio, increasing the denominator (income) improves your headroom. Practical strategies include:
- Applying after a confirmed salary increment or bonus cycle
- Applying as joint borrowers (e.g. spouse) to combine incomes
- For self-employed, ensuring at least 12 months of consistent income statements and tax filings
Homejourney’s Singpass / MyInfo integration on the bank rates page https://www.homejourney.sg/bank-rates pulls in your latest income data securely, minimising manual errors and helping banks assess you accurately and quickly.
5. Time Your Purchase with Interest Rate Trends
Higher interest rates increase your assessed monthly instalment, which pushes up TDSR even if the loan amount is the same. The shift to SORA-based packages has made rate movements more transparent, but you still need to watch trends carefully.
