Total Debt Servicing Ratio (TDSR) Singapore 2026: The 55% Rule That Caps Your Home Loan
Why your total monthly debt repayments can’t exceed 55% of your gross income under MAS rules
Total Debt Servicing Ratio (TDSR) is a Monetary Authority of Singapore (MAS) regulatory framework that caps the proportion of a borrower’s gross monthly income that can go toward servicing all debt obligations — including the new property loan, existing mortgages, car loans, credit cards and other liabilities — at 55%, when applying for a new property loan from a bank in Singapore.
Not financial advice. All figures for educational reference only. Data as at October 2026.
- TDSR caps total monthly debt repayments, including the new property loan, at 55% of a borrower’s gross monthly income, applying to both private property and HDB flat loans from banks.
- Banks must apply a stress-test interest rate floor of 4% per annum when calculating TDSR for a property loan, regardless of the actual interest rate offered, to ensure borrowers can withstand future rate increases.
- TDSR applies regardless of loan quantum since the rule was extended to cover HDB loans from banks (not HDB Board concessionary loans) in a tightening round.
- Only 100% of fixed income (such as salary) is counted in full for TDSR, while variable income such as bonuses, rental income and commissions is subject to a 70% haircut.
- TDSR is distinct from Mortgage Servicing Ratio (MSR), which applies only to HDB flats and Executive Condominiums and caps mortgage-specific repayments at 30% of gross income.
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What Is Total Debt Servicing Ratio?
TDSR was introduced by MAS in June 2013 as part of a broader set of cooling measures aimed at ensuring Singapore households do not over-leverage themselves when taking on property debt. Before TDSR, a borrower’s eligibility for a loan was often assessed loan-by-loan, which could allow someone with multiple existing debts to still qualify for a large new mortgage if the bank only looked at that single loan in isolation. TDSR forced banks to take a holistic view of a borrower’s entire debt obligations — car loans, personal loans, credit card balances, existing mortgages and the new loan being applied for — all added together against total gross income.
The framework applies at the point of a new property loan application (for purchase or refinancing) from a financial institution regulated by MAS, which includes banks and finance companies. It does not apply to a direct HDB Board concessionary loan, though it does apply if a buyer chooses a bank loan instead for an HDB flat. TDSR works alongside, not instead of, the Loan-to-Value (LTV) limit and, for HDB/EC purchases, the Mortgage Servicing Ratio (MSR).
How It Works in Singapore
Key TDSR mechanics as at 2026:
| Component | Rule |
|---|---|
| TDSR cap | 55% of gross monthly income |
| Stress-test interest rate (property loans) | 4% per annum minimum, applied regardless of the actual quoted rate |
| Fixed income (e.g. salary) | Counted at 100% |
| Variable income (bonus, rental, commission) | Counted at 70% (a 30% haircut applied) |
| Debts counted | All property loans, car loans, renovation loans, credit card minimum payments, personal loans, student loans and guarantor obligations |
The 4% stress-test rate is deliberately set above typical prevailing mortgage rates so that a borrower’s eligibility is tested against a higher future interest rate environment, reducing the risk of widespread default if rates rise after the loan is taken out. This means that even when actual mortgage rates are below 4%, the bank will still calculate the maximum loan amount as if the borrower were paying 4% interest, often shrinking the maximum loan quantum a borrower qualifies for.
Worked Example
A borrower earns a fixed monthly salary of $8,000 and has an existing car loan repayment of $700 a month. Her maximum allowable total monthly debt repayment under TDSR is 55% × $8,000 = $4,400. After deducting the $700 car loan, she has $3,700 a month available to service a new property loan, which the bank will then convert into a maximum loan quantum using the 4% stress-test rate over the loan tenure.
If she also receives an annual bonus equivalent to $2,000 a month averaged over the year, only 70% of that — $1,400 — is added to her income base for TDSR purposes, giving her a total recognised income of $9,400 and a TDSR ceiling of $5,170, before subtracting the $700 car loan.
Advantages
- Prevents system-wide over-leverage. By capping total debt obligations relative to income, TDSR reduces the risk that a large share of borrowers become unable to service their loans in an economic downturn or rate hike.
- Stress-tests against future rate increases. The 4% floor ensures loan eligibility is assessed conservatively, protecting borrowers from committing to a mortgage they can only afford at today’s unusually low rates.
- Holistic view of a borrower’s finances. TDSR considers all debts, not just the new mortgage, giving a more realistic picture of a borrower’s true repayment capacity.
- Consistent, rules-based framework across banks. Because TDSR is a MAS-mandated framework, borrowers face broadly consistent treatment regardless of which bank they approach for a loan.
Risks and Limitations
- Reduces maximum loan quantum compared to actual affordability. Because of the 4% stress-test rate and income haircuts, many borrowers qualify for a smaller loan than their actual monthly cash flow could comfortably support at prevailing rates.
- Variable-income earners are disadvantaged. Self-employed individuals, commission-based salespeople and those with large bonus components face a 30% haircut on that income, reducing their borrowing capacity relative to a salaried employee with the same total annual income.
- Existing debt materially shrinks new loan eligibility. A borrower with a car loan, student loan or large credit card balances will see their maximum new property loan reduced accordingly, which can catch first-time buyers off guard.
- Does not account for genuine ability to save or invest. TDSR is a blunt income-based cap and does not factor in a borrower’s savings rate, net worth, or other financial resilience beyond income and existing debt.
TDSR vs MSR
| Feature | TDSR | MSR |
|---|---|---|
| Cap level | 55% of gross monthly income | 30% of gross monthly income |
| Applies to | All property loans (private, HDB, EC) from banks | HDB flats and Executive Condominiums only |
| What it measures | ALL debt repayments (property + car + personal loans etc.) | The property loan repayment alone |
| Stress-test rate | 4% per annum | 4% per annum (same stress-test rate) |
| Which applies first for an HDB flat bank loan? | Both TDSR and MSR apply; the lower of the two resulting loan amounts governs | Both TDSR and MSR apply; the lower of the two resulting loan amounts governs |
The Bottom Line
TDSR is the backstop that determines how much total debt — not just mortgage debt — a Singapore borrower can responsibly take on relative to their income, and the 55% cap combined with the 4% stress-test rate means the maximum loan a bank will offer is often more conservative than a borrower might expect from their take-home cash flow alone. Anyone planning a property purchase in Singapore should calculate their TDSR position, including all existing debts, before assuming a particular loan quantum is achievable.
Related Terms:
Frequently Asked Questions
What is Total Debt Servicing Ratio in Singapore?
TDSR is a MAS framework that caps all of a borrower’s monthly debt repayments — including the new property loan, existing mortgages, car loans and credit cards — at 55% of gross monthly income, when applying for a bank property loan.
What interest rate is used to calculate TDSR?
Banks must apply a stress-test interest rate floor of 4% per annum when assessing TDSR for a property loan, even if the actual mortgage rate offered is lower.
Does TDSR apply to HDB loans?
TDSR applies to property loans from banks and financial institutions, including bank loans used to finance HDB flats. It does not apply to a direct concessionary loan taken from the HDB Board itself.
How is bonus or rental income treated under TDSR?
Variable income such as bonuses, commissions and rental income is counted at only 70% of its value (a 30% haircut) when calculating income for TDSR purposes, whereas fixed salary is counted in full.
What is the difference between TDSR and MSR?
TDSR caps all debt obligations at 55% of income and applies to any property loan, while Mortgage Servicing Ratio (MSR) caps only the mortgage repayment itself at 30% of income, and applies solely to HDB flats and Executive Condominiums.
Disclaimer: This glossary entry is for educational purposes only and does not constitute financial advice. Data sourced from official regulator and industry websites as at October 2026.