Question 1

What is TDSR and what is the limit in Singapore?

Accepted Answer

TDSR (Total Debt Servicing Ratio) is the percentage of your gross monthly income that goes towards all monthly debt obligations. This includes home loans, car loans, personal loans, student loans, and credit card minimums (calculated as 3% of outstanding balance). MAS mandates a maximum TDSR of 55% for all property loans granted since June 2013. If your TDSR exceeds 55% when you apply for a new loan, the bank will reduce the loan amount or reject the application.

Question 2

What is the difference between TDSR and MSR?

Accepted Answer

TDSR covers all loans (maximum 55% of gross income). MSR (Mortgage Servicing Ratio) is an additional rule that applies specifically to HDB flat purchases — it limits the monthly home loan repayment to 30% of gross monthly income. Both limits apply simultaneously when buying an HDB flat: your home loan must be ≤30% MSR AND your total debt must be ≤55% TDSR. MSR does not apply to private property purchases, which are only subject to TDSR.

Question 3

How do banks calculate TDSR for variable income earners?

Accepted Answer

MAS guidelines require banks to use a 'haircut' on variable income when computing TDSR. For commission, bonus, or freelance income, banks typically apply a 30% haircut — meaning only 70% of the monthly variable income is counted. For rental income, banks usually haircut by 20–30%. If your income is entirely variable (e.g., self-employed), some banks may average your last 2–3 years of NOA (Notice of Assessment) income from IRAS.

Question 4

Does TDSR apply to refinancing existing property loans?

Accepted Answer

Yes, TDSR applies to refinancing. However, MAS provides a 'transitional exemption' — if you are refinancing an existing property loan and the property was purchased before the TDSR framework (before 29 June 2013), and you are not increasing the loan amount or tenure, TDSR may not apply. For most post-2013 loans, full TDSR assessment applies at refinancing. Some lenders may also calculate TDSR slightly differently, so compare across banks.

Question 5

How can I improve my TDSR before applying for a home loan?

Accepted Answer

To lower your TDSR before a home loan application: (1) Pay off or close revolving credit facilities like credit cards — the 3% monthly obligation on credit card balances adds up quickly. A S$20,000 credit card balance = S$600/month in TDSR obligations even if you never carry a balance. (2) Pay down or close personal loans. (3) If you have a car loan expiring soon, consider delaying the home loan application. (4) Increase your documented income through a salary increment, bonus documentation, or rental income declaration.

Question 6

Is CPF included in income for TDSR calculation?

Accepted Answer

Yes. For salaried employees, gross monthly income includes both the cash portion and the CPF component of your salary. For example, if your total salary package is S$5,000 (employer pays S$500 CPF, you take home S$4,000 cash + S$500 employee CPF contribution), your gross income for TDSR is S$5,000. The bank will use your total gross employment income as reflected in your payslips or tax returns. CPF contributions used to service a home loan are also included as debt obligations.

Rule	Limit	Applies To	What's Counted
TDSR	55% of gross income	All property loans	All debt (home, car, personal, credit cards)
MSR	30% of gross income	HDB flat purchases only	Home loan repayment only
LTV	75% (private) / 80% (HDB)	All property loans	Loan-to-value of property

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