MSR Calculator: Check Your Monthly Mortgage Servicing Ratio

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The Mortgage Servicing Ratio (MSR) is a financial limit imposed by the Monetary Authority of Singapore (MAS) that determines how much of your monthly income can be used to repay all property loans, including the one you are applying for. It is currently fixed at 30% of your gross monthly income.

Run your numbers through the MSR calculator below to determine your monthly loan instalment limit.

 

What Home Loans Does It Apply To?

The MSR rule applies specifically to home loans for:

It does not apply to private properties (like condominiums or landed property), which are instead subject to the slightly more “lenient” Total Debt Servicing Ratio (TDSR) of 55%. Please check out our new launches' reviews if you are interested in purchasing a private property.

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Maximum Home Loan Eligibility (MSR) Calculator

Calculate your maximum borrowing eligibility specifically for HDB flats and new Executive Condominiums (ECs) under Singapore's Mortgage Servicing Ratio (MSR) framework. Your monthly housing loan instalment cannot exceed the designated MSR limit of your gross monthly income.

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How is MSR Calculated?

The formula is straightforward:

(Total monthly repayment instalments for all property loans / Gross monthly income) x 100% ≤ 30%

Learn more about stamp duty calculations or simply enter your numbers into the MSR calculator for instant assessment.

 

Key Points in the Calculation

  • Loan type: The MSR applies regardless of whether you are financing through an HDB Concessionary Loan or a Bank Loan.
  • Stress test: Besides MSR, borrowers are also subject to the TDSR framework, which takes into account other existing monthly debts (credit card, personal loan, car loan, etc) for computation.
  • Guarantor obligations: If you are a guarantor for another property loan, at least 20% of that monthly obligation must be included in your MSR calculation.
  • Gross income: This refers to your income before CPF contributions and personal taxes.

 

The Purpose of MSR

The MSR serves several critical purposes:

  1. Promote Prudent Borrowing: To ensure borrowers do not over-leverage on their property purchases and leave them with sufficient income for other living expenses.
  2. Enhance Financial Resilience: By capping the mortgage commitment at 30%, it ensures homeowners are better able to withstand potential financial shocks, such as job loss, illness, or unexpected increases in interest rates or living costs.
  3. Safeguard the Financial System: Alongside TDSR, it minimises the systemic risk of widespread loan defaults on the financial system.
  4. Cool the HDB/EC Market: For public housing, this stricter cap (30% vs TDSR's 55%) helps moderate demand and price growth in the HDB and EC segments, keeping them more affordable.

 

How MSR Affects Your Borrowing Limit and Property Purchase

The 30% cap significantly impacts your home-buying plans in the following ways:

  1. Directly Limits Your Maximum Loan: The MSR is often the binding constraint for HDB and EC buyers. For example, if your gross monthly income is $10,000, your total monthly property loan instalment cannot exceed $3,000. This fixed repayment amount, when combined with the prevailing interest rate and loan tenure, determines the maximum loan quantum you are eligible for, irrespective of how much cash you have.
  2. Affects Your Purchase Budget: Since your maximum loan is capped, your purchasing power is also capped. For example, a $3,000 monthly instalment at a 1.4% interest rate over a 25-year tenure yields a maximum loan of $759,004. This, plus your downpayment, determines the maximum property price you can afford.
  3. Extend Loan Tenure: The MSR cap may force you to accept a longer loan tenure than you originally planned to keep within your monthly instalment limit. This means you'll pay more interest over time.
  4. Prioritises Income Over Savings: The MSR is based on income, not assets. Having substantial savings or a large downpayment does not allow you to exceed the 30% cap. This ensures that your ongoing monthly cash flow, not just your upfront cash, is sufficient to service the loan.
  5. Potentially a Deal-Breaker: For younger buyers with shorter earning histories or those with other property loans, the MSR can be a significant hurdle. Falling in love with a property only to discover your monthly instalment exceeds the 30% cap means you are legally ineligible for the loan - no bank can approve it.

After assessing your MSR limit, it is also important to find a home loan that suits your current and long-term needs.

 

MSR vs TDSR: A Quick Comparison

Feature MSR TDSR
Applies To HDB flats and ECs (with unexpired MOP) All property loans (including private property)
Legal Cap 30% of gross monthly income 55% of gross monthly income
Debts Included Only property loans All debt obligations (property, car, personal, credit cards, student loans, etc.)
Key Purpose Ensure affordability and cool the public housing market Ensure overall debt sustainability for borrowers

In Summary

The MSR is a strict, income-based regulation to ensure buyers of HDB flats and new ECs do not overextend their finances to service their mortgage.

The financing cap at 30% of your gross income will directly limit the maximum loan you can take, which in turn determines the price range of properties you can realistically afford.

Key takeaway: Before you start viewing HDB flats or ECs, run the MSR calculator. Knowing your maximum monthly instalment upfront will enable you to focus your property search on those within your financial means.

 

Other Home Financing Calculators

Besides the MSR Calculator, check out our suite of home loan calculators below to help you with your budgeting and affordability assessment: