Complete Guide to TDSR in Singapore (2026)

What is TDSR?

Total Debt Servicing Ratio (TDSR) is a measure of debt affordability used by banks in Singapore to determine how much you can borrow for a property loan. It represents the percentage of your gross monthly income that goes toward servicing all debt obligations.

TDSR was introduced by the Monetary Authority of Singapore (MAS) in 2013 to prevent over-borrowing and ensure financial stability for property buyers. The regulation applies to all property buyers taking bank loans in Singapore, including Singapore Citizens, PRs, and foreigners.

Who Does TDSR Apply To?

• All property buyers taking bank loans (HDB or private)
• Singapore Citizens, PRs, and foreigners
• Both individuals and co-borrowers

Who Does TDSR NOT Apply To?

• HDB loan takers (use MSR instead - see TDSR vs MSR)

TDSR Formula & Calculation

The TDSR formula is straightforward, but understanding what counts as "debt obligations" and "income" is critical.

What Counts as "Total Monthly Debt Obligations"?

• Property loan installments (existing + new property)
• Car loans
• Personal loans
• Credit card minimum payments (calculated as 3-5% of outstanding balance)
• Student loans
• Other secured/unsecured loans

What Counts as "Gross Monthly Income"?

• Base salary
• Fixed allowances (transport, housing)
• Variable income (bonuses, commissions) - banks typically only count 50-70% of average annual bonus
• Rental income from existing properties (banks may count 70-80% of gross rental)

Step-by-Step Example

TDSR vs MSR

Singapore has two debt servicing ratios: TDSR (Total Debt Servicing Ratio) and MSR (Mortgage Servicing Ratio). Understanding the difference is critical for property planning.

Which One Applies to You?

• HDB loan: MSR (30% limit, property loan only)
• Bank loan (HDB or private property): TDSR (55% limit, all debts)

Why TDSR is More Restrictive

If you have existing debts (car loan, credit cards), TDSR eats into your borrowing capacity. MSR only looks at the property loan, so other debts don't affect it.

How Banks Calculate TDSR

Banks don't just use your stated income and current interest rates. They apply stress tests and conservative assumptions to ensure you can afford the loan even if circumstances change.

Interest Rate Stress Testing

Banks don't use the actual mortgage rate (e.g., 3.0%). They stress-test at a higher rate to ensure you can still afford the loan if interest rates rise.

Loan Tenure Considerations

• Longer tenure = lower monthly payment = higher loan amount
• But: total interest paid increases significantly
• Banks may cap tenure at 30 years or age 65-75 (whichever is shorter)

Variable Income Treatment

• Bonuses, commissions: Banks typically average the last 2-3 years and count 50-70%
• Rental income: Banks count 70-80% of gross rental (to account for vacancy, maintenance)
• Self-employed income: Banks require 2+ years of tax returns, average income

Credit Card Debt Calculation

Banks calculate minimum payment as 3-5% of outstanding balance. Even if you pay in full every month, the outstanding balance at the time of loan application is counted.

Example Scenario: Impact of Clearing Credit Card Debt

How to Improve Your TDSR

If your TDSR is too high (approaching or exceeding 55%), you won't qualify for a home loan. Here are strategies to improve your TDSR before applying.

1. Pay Down Existing Debts

The most impactful strategy. Focus on:

• Clear credit card balances (most impactful - 5% minimum payment calculation)
• Pay off personal loans or car loans early (if no prepayment penalty)

2. Increase Your Income

• Ask for a raise or promotion
• Take on a part-time job or freelance work (must be documented, stable income)
• Rent out a room (rental income counts toward gross income)

3. Reduce Monthly Debt Obligations

• Refinance existing loans to lower interest rates (reduce monthly payment)
• Extend car loan tenure (reduce monthly payment, but increases total interest)

4. Apply with a Co-Borrower

If applying with a spouse or family member, their income is added to gross monthly income. BUT: their existing debts are also counted.

5. Avoid Taking on New Debts Before Applying

• Don't buy a car, take personal loans, or rack up credit card debt 6-12 months before applying
• If you need a car, buy it AFTER securing the home loan

6. Time Your Application Strategically

• Apply after receiving bonus (if bonus is counted as income)
• Apply after paying off debts (to reduce monthly obligations)

Common TDSR Mistakes

TDSR and Multi-Property Strategies

Buying a second property when you already have a home loan is challenging. Your first property loan counts as an existing debt obligation, reducing TDSR headroom for the second property loan.

The Challenge

Strategies for Multi-Property TDSR Management

1. Increase Income

Rental from first property counts as income (70-80%). This improves your TDSR for the second property loan.

2. Refinance First Property Loan

Lower interest rate = lower monthly payment = more TDSR headroom for the second property.

3. Pay Down First Property Loan Principal

Reduces monthly installment, freeing up TDSR headroom.

4. Sell First Property Before Buying Second

Frees up entire TDSR headroom (but creates temporary housing gap).

5. Decouple (for Married Couples)

Solo owner of first property has that debt, other spouse buys second property with full TDSR headroom. See our Decoupling guide for details.

Frequently Asked Questions (FAQ)

Conclusion & Next Steps

TDSR is the single most important factor in determining home loan eligibility. Understanding how it's calculated, how banks stress-test it, and strategies to improve it can significantly impact your property planning.

Key Takeaways:

• TDSR limit is 55% of gross monthly income
• All debts count (property + car + credit cards + personal loans)
• Banks stress-test at 4.0-4.5% interest rate, not the actual rate
• Clearing credit card debt can increase borrowing capacity by 40%+
• Multi-property strategies require careful TDSR management