Almost every client who comes to me with a target price in mind has not yet checked whether a bank will actually lend them that much. In Singapore, the amount you can borrow is not primarily about the property; it is about two regulatory frameworks set by the Monetary Authority of Singapore: the Total Debt Servicing Ratio, and, for HDB flats and executive condominiums, the Mortgage Servicing Ratio on top of it. Understanding both before you start viewing units saves you from negotiating, and sometimes paying a deposit, on a home you cannot finance.
What TDSR actually measures
TDSR caps the share of your gross monthly income that can go toward servicing all your debt obligations, not just the new home loan, at 55%. That includes existing car loans, personal loans, credit card minimum payments, and any other property loans you are still servicing. Banks add up everything you owe each month, add the projected instalment on the new loan, and check the total against 55% of your gross monthly income. It is a portfolio-wide test, which is why paying down a car loan or a credit card balance before applying can sometimes unlock a meaningfully larger mortgage than people expect.
What MSR adds on top, and when it applies
If you are buying an HDB flat or an executive condominium, there is a second, stricter cap called the Mortgage Servicing Ratio, set at 30% of gross monthly income, and it applies specifically to the home loan instalment itself. MSR does not replace TDSR; both apply, and you need to satisfy whichever cap binds first. Private condominiums and landed property outside the EC scheme are not subject to MSR, which is one of the reasons the financing maths can look noticeably different between an EC and a comparable private project nearby, even at a similar price point.
Why your payslip number is not the bank's number
Banks do not simply take your monthly salary at face value. Variable income such as bonuses and commissions is typically haircut, often by 30%, before it counts toward your servicing ratio. Rental income from existing properties is haircut as well. If you are self-employed, lenders will usually average your declared income over the past two years rather than use your most recent, possibly stronger, year alone. None of this is arbitrary; it reflects how conservatively MAS wants banks to assess serviceability across an entire economic cycle, not just the good years.
A simple way to see it in action
Take a hypothetical buyer earning $8,000 a month in basic salary, with a car loan instalment of $800. Under TDSR, the combined ceiling for all debt servicing is 55% of $8,000, or $4,400. After deducting the $800 car loan, that leaves roughly $3,600 a month available for the new mortgage instalment under TDSR alone. If the purchase is an HDB resale flat, MSR then caps the home loan instalment itself at 30% of income, or $2,400, which becomes the binding constraint even though TDSR would have allowed more. The same buyer purchasing a private condominium would not face the MSR cap at all, only the $3,600 TDSR figure. Two buyers with identical income can therefore have very different borrowing power depending entirely on what they are buying.
Where the headroom actually comes from
Clients are often surprised at how much their maximum loan size can move once we look at the full picture. Extending the loan tenure, within the regulatory caps tied to your age and the property type, reduces the monthly instalment and therefore the ratio. Adding a co-borrower with stable income increases combined servicing capacity, though it also means joint liability for the full loan. Clearing smaller debts before applying often does more for your maximum loan size than people expect, precisely because TDSR is a portfolio-wide test rather than a test of the new loan in isolation.
Check this before you view, not after you offer
I always tell clients to run the numbers before they fall in love with a specific unit, not after. A quick check against your income, your existing commitments, and the property type tells you your real ceiling, which is sometimes higher than you assumed and sometimes lower. That is exactly why there is a TDSR and MSR calculator on this site that walks through the income haircuts and existing commitments most people forget to account for. If your numbers come out close to the cap, or you are not sure how a bonus or rental income will be treated, it is worth a conversation before you commit to anything.