The Core TDSR Rule
TDSR cannot exceed 55% of gross monthly income.
This means the total of all monthly debt obligations — including the new loan being applied for — must not exceed 55% of the borrower’s gross monthly income.
What counts as debt:
- The proposed new property loan instalment
- All other property loans
- Car loans, student loans, renovation loans
- Credit card balances (counted at 5% of outstanding balance per month)
- All other revolving credit
If your client has a $500/month car loan, a $200,000 credit card balance (= $10,000/month in TDSR calculation), and a gross income of $8,000/month — they may be substantially more constrained than they realise.
The 4% Stress Test Floor
Banks cannot calculate loan affordability at the current loan rate alone. MAS requires financial institutions to stress-test repayment at a medium-term interest rate floor of 4% per annum — or the loan’s long-term rate, whichever is higher.
This rule (in effect since September 2022) significantly reduces the maximum loan quantum compared to calculations based on current market rates. Even if your client can comfortably service a loan at 3%, the bank tests at 4%.
Source: MAS Notice 645.
MSR for HDB and EC Purchases
For HDB flat purchases and Executive Condominium (EC) purchases during the development period, an additional Mortgage Servicing Ratio (MSR) cap of 30% applies.
MSR is stricter — it limits the property loan instalment alone to 30% of gross monthly income. This is a sub-constraint within TDSR, not an alternative.
Example: A buyer with $6,000/month gross income faces a maximum HDB loan instalment of $1,800/month (30% MSR). Their total debt obligations are still capped at $3,300/month (55% TDSR).
Variable Income Haircut
Banks apply a 30% haircut to variable income when calculating TDSR eligibility. Commission income, bonuses, and rental income are all subject to this haircut.
For property agents advising clients who are themselves property agents, freelancers, or commission-earners — this haircut can meaningfully reduce the qualifying loan quantum.
HDB Loans Are Exempt from TDSR
HDB concessionary loans are not subject to MAS TDSR rules. However, HDB applies its own income assessment, and the MSR cap still applies. This distinction matters when clients are comparing HDB loan vs. bank loan options.
Check TDSR before your client talks to the bank. LEVR’s TDSR calculator tests affordability using the MAS 4% stress-test floor, includes MSR checks for HDB/EC purchases, and flags whether the proposed loan is within limits. Rates verified against Q2 2026 MAS guidelines.