The Total Debt Servicing Ratio — TDSR — is one of the most important concepts in Singapore property financing, and also one of the most misunderstood. Getting clear on how it works, what counts toward it, and how to improve it before you apply for a loan can be the difference between qualifying for the property you want and having to settle for something smaller.
What TDSR Is
TDSR is a regulatory cap introduced by MAS (Monetary Authority of Singapore) that limits the total monthly debt obligations a borrower can take on relative to their gross monthly income. The current cap is 55% — meaning your total monthly debt repayments across all loans cannot exceed 55% of your gross monthly income.
In practice: if your gross household income is $12,000 per month, your total monthly debt obligations — including the new mortgage — cannot exceed $6,600.
What Counts Toward TDSR
All debt obligations count: home loans (including the one you're applying for), car loans, student loans, personal loans, credit card minimum payments (typically 5% of the outstanding balance per month is used), and any other instalment obligations. The key word is "all" — lenders will pull your credit bureau report and add up every obligation, including facilities you may have forgotten about or treat as inconsequential.
How It Affects Your Loan Quantum
The TDSR cap works backwards from your income. If your gross household income is $12,000 and you already have a car loan repayment of $1,200 per month, your available TDSR room for the mortgage is $6,600 - $1,200 = $5,400 per month. That monthly repayment figure, combined with the bank's stress-test interest rate (typically 4.5% or higher), determines your maximum loan quantum.
How To Improve Your TDSR Position Before Applying
The most effective moves: clear credit card balances completely (or as close to zero as possible) before applying — even a small balance adds to your monthly TDSR obligations. Fully repay any personal loans. If you have a car loan and the car is not essential, consider whether the TDSR headroom it creates is worth the logistical adjustment. Each dollar of monthly obligations you eliminate expands your qualifying loan quantum meaningfully.