Understanding TDSR and MSR: How to Qualify for a Property Loan (2026)

How we made this. Updated for 2026 with AI-assisted research. Figures are linked to their sources — check them before you act.

The Total Debt Servicing Ratio (TDSR) caps how much of your income can go to all your debts, including the new home loan. In 2026 the cap is 55% of gross monthly income. For HDB flats and new executive condominiums, the Mortgage Servicing Ratio (MSR) also caps the home loan alone at 30%. Banks test both at a notional interest rate of 4%, not at today’s package rates of about 1.5–2%. That is why your loan offer is often smaller than you expect.

At a glance

TDSR: 55% of gross monthly income for all debt payments (MAS). It was 60% until 16 December 2021.
MSR: 30% for HDB flats and for ECs bought from developers within the MOP. It does not apply to private property.
Stress-test rate: banks use at least 4% (it was 3.5% before September 2022). HDB uses 3% for its own loans.
Not all income counts in full. Banks count at most 70% of variable income such as bonuses and commission, and 70% of rental income. Savings can count too, after a haircut, spread over 48 months.
The quickest way to borrow more is to clear other debts, especially car loans, before you apply.

What TDSR and MSR measure

MAS introduced TDSR in June 2013 through Notice 645, last revised in August 2025, to make banks lend only what borrowers can repay. Every bank and finance company must apply it to property loans.

TDSR = all monthly debt payments ÷ gross monthly income ≤ 55%

The debts include the new property loan (at the stress rate), existing home loans, car loans, personal loans and other credit. For credit cards and credit lines, banks use the monthly payment shown on your credit bureau report or latest statement. If you guarantee someone else’s loan, at least 20% of its instalment counts against you.

MSR = monthly payments on all property loans ÷ gross monthly income ≤ 30%

MSR applies to bank loans for HDB flats and for new ECs within the minimum occupation period. It counts all your property loans, including any equity loans. HDB applies the same 30% limit to its own loans. When you buy an HDB flat with a bank loan, the bank must meet both MSR and TDSR.

Rule	Limit	Applies to	Stress rate
TDSR	55%	All property loans from banks and finance companies	4% (5% non-residential)
MSR	30%	HDB flats; new ECs within MOP	4% for bank loans; 3% for HDB loans

The stress test: why today’s rate does not count

Banks do not size your loan at the rate you will pay. MAS requires them to use the higher of the actual rate or a medium-term rate of 4% for residential loans. For HDB loans, HDB uses 3%, or the HDB loan rate if that is higher. With three-month SORA at about 1.2% in October 2026 and most packages at about 1.5–2.2%, the gap between actual rates and the stress rate is wide.

Take a S$900,000 loan over 30 years. At 1.8% the payment is about S$3,237 a month. At the 4% stress rate it is about S$4,297. The bank checks the S$4,297 figure against your income.

This is a protection, not a punishment. If rates return to 2023 levels, a borrower who passed at 4% can still pay.

How banks count your income

Banks use your gross monthly income, but not all of it counts in full. Employer CPF contributions are left out. MAS Notice 645 sets these minimum haircuts, and banks may apply stricter ones:

Income or asset	How much counts
Fixed salary	100%
Variable income (bonus, commission, allowances)	Up to 70% of the 12-month average, or of the variable part of your latest Notice of Assessment
Rental income	Up to 70%, if the tenancy agreement is stamped and has at least 6 months left
Cash and deposits pledged to the bank for 4 years	100% of the value, spread over 48 months
Other financial assets (shares, funds, gold) pledged for 4 years	70% of the value, spread over 48 months
Any financial asset not pledged	30% of the value, spread over 48 months

Savings make a large difference for retirees and the self-employed. S$500,000 in unpledged savings counts as 30% × S$500,000 ÷ 48, or about S$3,125 a month of income. If you pledge the same amount in cash to the bank for four years, it counts as about S$10,417 a month.

Before you rely on bonus or commission income, collect 12 months of payslips or statements and your latest Notice of Assessment. Banks count only what you can prove.

Worked example: how much can you borrow?

Say you are 35 and buying a condo on your own. Your fixed salary is S$8,000 a month. Your bonus averages S$2,000 a month. You have a car loan of S$900 a month.

Step	Calculation	Result
Income counted	S$8,000 + 70% × S$2,000	S$9,400
TDSR limit	55% × S$9,400	S$5,170
Less car loan	S$5,170 − S$900	S$4,270 for the mortgage
Maximum loan	S$4,270 a month at 4% over 30 years	about S$894,000

If you pay off the car loan first, the whole S$5,170 is available for the mortgage. The maximum loan rises to about S$1.08m. Clearing a S$900-a-month car loan adds about S$189,000 to your borrowing limit.

Now say you buy an HDB resale flat with a bank loan instead. MSR applies: 30% × S$9,400 = S$2,820 a month. At 4% over 25 years, that supports a loan of about S$534,000, whether or not you have a car loan. (A bank loan on an HDB flat can run for up to 30 years, but the LTV limit falls if it runs longer than 25.) TDSR still applies too, so the bank uses the lower of the two limits.

Check the LTV limit as well. For a first loan from a bank, you can borrow up to 75% of the price or valuation, whichever is lower. The LTV limit falls to 55% if the tenure is longer than 30 years (25 years for HDB flats) or if the loan runs past age 65. Your loan is the lowest of the TDSR, MSR and LTV limits.

Age, tenure and joint borrowers

Banks set the loan tenure using the income-weighted average age of the borrowers. Older borrowers get shorter tenures, and a shorter tenure means a higher monthly payment for the same loan. That means a lower maximum loan under TDSR.

For example, a borrower aged 54 who earns S$10,000 a month has S$5,500 for debts under TDSR. Over 30 years at 4%, that supports a loan of about S$1.15m. But a loan that runs to age 65 lasts only 11 years, and over 11 years it supports only about S$587,000. A longer tenure past 65 is possible, but the LTV limit then falls by 20 points.

Adding a younger, working co-borrower increases both the income and the tenure. Because the average age is weighted by income, a co-borrower who earns little does not lower the average much. Two more rules matter. Every borrower must also be an owner of the property, under MAS Notice 632. And if someone guarantees your loan because you cannot meet TDSR on your own, MAS requires the bank to make that person a co-borrower.

How to put yourself in a better position

Clear or reduce other debts first. Car loans have the largest effect because the payments are large and fixed.
Cancel unused credit lines before you apply. If no monthly payment shows on your credit report or statement, the bank can apply an interest rate to the whole credit limit. A large unused limit can then count against you.
Document variable income. Keep payslips, commission statements and Notices of Assessment for at least 12 months. Banks count only 70% of variable income, and only what you can prove.
Use savings to show income if you need to. Unpledged savings count at only 30%. Cash pledged to the bank for four years counts in full, spread over 48 months.
Get an In-Principle Approval (IPA) before you pay an option fee. For HDB loans, get an HDB Flat Eligibility (HFE) letter, which is valid for nine months. Family income must be within S$16,000 a month, the ceiling from 24 August 2026.
Do not stretch to the limit. TDSR is a ceiling. Our 3/3/5 affordability guide suggests keeping the mortgage under a third of income.

When TDSR does not apply

MAS exempts some loans from TDSR:

Refinancing a home you live in. This is exempt, so owner-occupiers can switch banks even if their income has fallen.
Refinancing an investment property. TDSR applies, unless you make a capital repayment, shorten the tenure without changing the rate formula, or commit to reduce the loan by at least 3% within three years. Our refinancing guide explains the options.
Bridging loans repaid within six months.
Loans where total borrowing secured on the property is 50% or less of its market value.

HDB loans are sized by HDB itself. Under its own rules, instalments can be up to 30% of income, tested at a 3% rate, and family income must be within S$16,000 a month.

Bottom line

TDSR and MSR decide your maximum loan, and the 4% stress test makes that maximum smaller than today’s low rates suggest. To borrow more, clear your other debts, document your income and think carefully about tenure and co-borrowers. Then borrow less than the maximum. Check your numbers with our mortgage calculator, and read why mortgage applications fail and how the LTV limit works.

Sources

MSR and TDSR rules — MAS, 16 Dec 2021 (checked Oct 2026)
Notice 645: Computation of Total Debt Servicing Ratio for Property Loans — MAS, last revised 21 Aug 2025
Notice 632: Residential Property Loans — MAS, last revised 21 Aug 2025
Rules for new housing loans — MAS (checked Oct 2026)
Who TDSR applies to — MAS (checked Oct 2026)
Loan tenure and loan-to-value limits — MAS, updated 27 Mar 2024
Measures to promote sustainable conditions in the property market — MAS, 29 Sep 2022
S’pore mortgage rates rise following Fed hike: What home owners should look out for — The Business Times, 2 Oct 2026
Housing loan from HDB — HDB (checked Oct 2026)
Application for an HDB Flat Eligibility (HFE) letter — HDB, updated 19 Aug 2026
HDB loans guide — gov.sg (My Nice Home), 24 Aug 2026