TDSR and MSR are the two rules that decide how large a home loan you can get in Singapore. They sound technical, but the idea is simple: the regulator wants your monthly repayments to stay well within what you earn, even if interest rates rise.
TDSR — the 55% rule
The Total Debt Servicing Ratio caps all your monthly debt obligations — home loan, car loan, personal loans, credit-card instalments — at 55% of your gross monthly income. It applies to essentially every property loan, including private condos.
MSR — the 30% rule (HDB & EC only)
The Mortgage Servicing Ratio caps your housing loan repayment at 30% of gross monthly income, and it applies only to HDB flats and Executive Condominiums bought from a developer. Buying a private resale condo? MSR does not apply — only TDSR does. Where both apply, the lower ceiling wins.
The 4% stress rate
Here is the part that trips people up. Banks do not size your loan using the attractive promotional rate you will actually pay. They compute TDSR and MSR using a medium-term interest rate floor of 4.00% p.a. — a stress test. Your real repayment may be lower, but your borrowing limit is set as though rates were 4%.
You might sign a loan at 3% but qualify as if it were 4%. That gap is the safety margin built into the system.
What raises or lowers your limit
- Longer tenure raises the loan you qualify for — but tenures beyond 30 years (private) or that run past age 65 reduce your LTV to 55%.
- Other debts directly eat into your TDSR headroom — clear car and personal loans before applying.
- Variable income (bonuses, rental, self-employment) is typically haircut by 30% when assessed.
In one sentence
TDSR (55% of income, all debts) and — for HDB/ECs — MSR (30% of income, housing only), both tested at a 4% stress rate, set the ceiling on what you can borrow; the rest of your budget comes down to LTV and the cash and CPF you can put down.