TDSR Calculator: Check Your Monthly Total Debt Servicing Ratio

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The Total Debt Servicing Ratio (TDSR) is a regulation imposed by the Monetary Authority of Singapore (MAS) since 2013 to encourage responsible borrowing. It sets a limit on how much of your gross monthly income can go towards repaying all your monthly debt obligations, helping to ensure you can comfortably finance your property loan.

The current TDSR threshold is 55%. This means your total monthly debt obligations cannot exceed 55% of your gross monthly income. It applies to all residential properties, including private properties, executive condominiums and HDB flats.

This can be easily determined using the TDSR calculator below. It's free and easy to use. Try it out!

Sg Home Investment

Total Debt Servicing Ratio (TDSR) Calculator

Calculate your maximum borrowing eligibility based on Singapore's Total Debt Servicing Ratio (TDSR) framework. Under current regulations, your total monthly debt obligations cannot exceed the designated TDSR limit of your gross monthly income.

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How is TDSR Calculated?

For manual calculation, the TDSR formula is as follows:

(Total monthly debt obligations / Gross monthly income) x 100% ≤ 55%

If you are looking for a new home, check out my in-depth property reviews.  You may also like to check out my guide on choosing a home loan and other property resources.

 

What's included in Total Monthly Debt Obligations?

This includes all your monthly debt repayments, such as:

  • The new property loan you are applying for.
  • Any existing property loans (mortgages).
  • Car loans.
  • Student loans.
  • Renovation loans.
  • Credit card balances and other personal loans.

 

How is Gross Monthly Income assessed?

Financial institutions (FIs) take a conservative approach when calculating your income for TDSR:

  • Fixed Income: Your regular monthly salary is recognised fully.
  • Variable Income: A "haircut" of 30% is applied to variable income, like bonuses, commissions and allowances, to account for their uncertainty.
  • Rental Income: This is also subject to a 30% haircut and the income received must be supported by a valid tenancy agreement.
  • Financial Assets: Some eligible financial assets can be counted as income, but they are also subject to haircuts, such as “unpledging” them to secure a higher loan quantum. Refer to “Property Financing Options” for more information.
  • Medium-Term Interest Rate: Banks use a higher "medium-term" interest rate (with a floor of 4% for residential property loans) to calculate your mortgage payment for the TDSR. This provides a buffer against future interest rate hikes.

 

The Purpose of Total Debt Servicing Ratio (TDSR)

The TDSR serves several critical purposes to promote financial stability and prudent borrowing:

  1. Prevent Over-Leveraging: To ensure borrowers do not take on more debt than they can comfortably service based on their income, reducing the risk of default.
  2. Strengthen Credit Underwriting: Mandates financial institutions to undertake a more holistic and thorough assessment of a borrower's repayment ability before granting a property loan.
  3. Encourage Financial Prudence: It encourages individuals to be more mindful of their total debt obligation and overall financial health.
  4. Ensure Long-Term Market Stability: By capping how much people can borrow, the TDSR helps to moderate demand and prevent excessive property price growth, contributing to long-term market stability and sustainability.

 

How TDSR Affects Your Borrowing Limit and Property Purchase

The 55% cap significantly impacts your home-buying plans in the following ways:

  1. It Determines Your Maximum Loan Quantum: The TDSR directly limits how much a bank can lend you. Your total debt obligations, including the new home loan, must fit within the 55% ceiling. This, in turn, determines the maximum loan amount you qualify for and thus the price range of properties you can afford.
  2. Existing Debts Reduce Your Borrowing Power: Any existing debts, such as car loans, student loans, and credit card bills, will go towards a reduction of your 55% allowance. For example, if you earn S$8,000 a month and have a S$500 monthly car loan, the maximum you can spend on your mortgage is S$4,400 (55% of S$8,000) - S$500 = S$3,900 per month. This is less than what you could have borrowed without the car loan.
  3. Applicable to All Property Types: Unlike the Mortgage Servicing Ratio (MSR), which only applies to HDB flats and ECs, the TDSR applies to all types of property purchases, including private condominiums and landed property.
  4. It Applies to Both Purchases and Refinancing: The TDSR framework covers new property purchases as well as the refinancing of investment properties. However, MAS grants a complete TDSR exemption for owner-occupiers refinancing their own homes, allowing homeowners to switch banks for better interest rates even if their financial situations have changed, provided they do not top up the loan amount.
  5. Exceptions for Selling an Existing Property: If you are buying a new property while still owning an existing one, the monthly instalment for your existing property's loan can be excluded from your TDSR calculation, provided you have a signed sale and purchase agreement for the property you are selling. This allows for smoother transitions for upgraders.

 

TDSR vs MSR: A Quick Comparison

Feature TDSR MSR
Applies To All property types (HDB, EC, private) HDB flats and new EC launches
Legal Cap 55% of gross monthly income 30% of gross monthly income
Debts Included All debt obligations (property, car, personal, credit cards, student loans, etc.) Only property loans
Key Purpose Ensure overall debt sustainability and prudent borrowing for all property types Ensure affordability and moderate demand in the public housing market

In Summary

The TDSR is a comprehensive, income-based regulation that serves as a critical safeguard for both borrowers and the financial system. The capping of debt obligations at 55% of gross monthly income prevents over-commitment of finances.

This directly determines the maximum loan you can secure, and ultimately, the property price you can afford.

Key takeaway: Before you start your property search, it is vital to calculate your TDSR. Understanding how much of your income is already tied up in existing debts and how much is available for a home loan will help you focus your search on properties within your affordability, saving you time, heartache, and a less financially-strapped lifestyle.

 

Frequently Asked Questions (FAQ)

What is the Total Debt Servicing Ratio (TDSR) limit in Singapore?

Under the current Monetary Authority of Singapore (MAS) regulations, the Total Debt Servicing Ratio (TDSR) is capped at 55%. This means a borrower's total monthly debt obligations—including home loans, car loans, personal loans, and credit card balances—cannot exceed 55% of their gross monthly income.

 

What types of debt are included in the TDSR calculation?

The TDSR calculation considers all outstanding personal liabilities. This includes your prospective monthly housing mortgage instalment, plus existing commitments such as car retail loans, study loans, personal loans, equity loans, and minimum monthly repayments on all credit cards.

 

How does an investment property mortgage affect my TDSR?

If you are purchasing a secondary investment property, the prospective mortgage loan must be factored into your total monthly obligations. If you have existing rental income from another property, banks typically apply a 30% haircut to that revenue before adding it to your total gross monthly income for evaluation.

 

Other Mortgage Financing Calculators

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

 

Property Resources & Market Guides

Meanwhile, below are some property resources and guides that you may find useful: