The Monetary Authority of Singapore has set that borrowers must exceed Total-Debt-Servicing-Ratio (TDSR) of 60% of the borrowers’ gross monthly income when they are applying for the home loan for a property purchase in Singapore.

To calculate a borrower’s TDSR, use the following formula:

((Borrower’s total current monthly debt obligations + Borrower’s new monthly Home loan Installment) / Borrower’s gross monthly income)) x 100%

Note: The Borrower’s new monthly Home loan Installment should be calculated with a prevailing interest rate of 3.5% when assessing TDSR.

All monthly recurring debt should be included when calculating for TDSR. These include:

  • Property-related loans, including the loan being applied for.
  • Car loans.
  • Student loans.
  • Renovation loans.
  • Credit card loans.
  • Any other secured or unsecured loans, including revolving loan.

In addition, all variable income such as bonus, commission etc should get a haircut of 30%. This means TDSR is capped at 42% for variable income instead of the usual 60%.

See The Monetary Authority of Singapore TDSR for more details.