Buying a home in Singapore is an exciting milestone — but before you start shortlisting units or visiting showflats, it’s crucial to understand how much you can actually borrow. That’s where MSR (Mortgage Servicing Ratio) and TDSR (Total Debt Servicing Ratio) come in.
These two frameworks play a major role in determining your maximum loan, and misunderstanding them often leads to disappointment, rejected loan applications, or the need to drastically adjust your property expectations.
This comprehensive 2025 guide breaks down everything you need to know about MSR and TDSR, including definitions, examples, comparisons, and how they affect HDB, EC and private home buyers today.
What Are MSR and TDSR?
Singapore’s property market is one of the most financially regulated in the world. To ensure buyers stay financially prudent, MAS (Monetary Authority of Singapore) introduced the MSR and TDSR frameworks to prevent households from over-borrowing.
MSR (Mortgage Servicing Ratio)
Regulates how much income you can use for your HDB or EC mortgage.
TDSR (Total Debt Servicing Ratio)
Regulates how much income you can use for all your monthly debt obligations, including mortgage, car loan, personal loans and credit card balances.
Every buyer must pass TDSR — but only buyers of HDB and newer ECs need to pass MSR as well.
Understanding MSR — The Rule That Affects HDB and EC Buyers Most
MSR limits the percentage of your gross monthly income that can be used to repay your HDB or EC housing loan.
MSR Limit: 30% of Gross Monthly Income
This is a strict affordability cap designed to ensure public housing buyers stay financially conservative.
Applies To:
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HDB BTO flats
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HDB resale flats
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Executive Condominiums (only within the first 10 years from TOP)
MSR Covers Only One Thing:
✔ Your monthly housing mortgage instalment
No other debts are included under MSR calculations.
Example — MSR Calculation
If your monthly income is $10,000:
-
Maximum monthly housing instalment allowed → $3,000
-
(Because 30% × $10,000 = $3,000)
Even if you are comfortable paying more, MSR sets a hard limit.
This is why MSR is usually the main constraint for:
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Young couples buying their first HDB
-
Buyers with lower income
-
EC buyers who haven’t passed the 10-year mark
Understanding TDSR — The Rule That Applies to All Property Purchases
TDSR limits how much of your income can go toward all your monthly debt obligations combined.
TDSR Limit: 55% of Gross Monthly Income
This percentage applies across the board for all home buyers and all property types.
Applies To:
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HDB
-
Executive Condominiums (all phases)
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Private condominiums
-
Landed properties
-
Multi-property investors
TDSR Includes:
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Monthly housing instalment
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Car loans
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Personal/renovation loans
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Education loans
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Credit card balances
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Any recurring debt obligations
Example — TDSR Calculation
If your monthly income is $10,000:
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Maximum allowable monthly debt → $5,500
-
(Because 55% × $10,000 = $5,500)
If you already have:
-
Car loan instalment: $900
-
Personal loan: $300
-
Credit card balance: $200
Total existing debt = $1,400
Maximum mortgage instalment allowed under TDSR:
$5,500 – $1,400 = $4,100
This is why many private home buyers clear personal loans before applying for a new mortgage.
MSR vs TDSR — Key Differences Every Buyer Should Know
Here’s a simple comparison:
| Feature | MSR | TDSR |
|---|---|---|
| Applies To | HDB & EC (first 10 years) | All property types |
| Limit | 30% of gross income | 55% of gross income |
| Covers | Housing instalment only | All monthly debt obligations |
| Stricter? | ✔ Yes | More flexible |
| Mainly affects | First-time HDB buyers & EC upgraders | Private home buyers & multiple-property owners |
Short answer:
⭐ MSR is stricter and applies only to public housing buyers.
⭐ TDSR applies to everyone and determines your maximum loan if you own other debts.
Which One Matters More for Your Purchase?
If you’re buying an HDB:
You must pass both MSR and TDSR.
But MSR usually becomes the primary limitation.
If you’re buying an EC:
For the first 10 years → MSR + TDSR apply
After 10 years → only TDSR applies
If you’re buying private property:
Only TDSR applies.
Your loan size will depend heavily on:
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Existing debts
-
Income stability
-
Remaining loan tenure
-
Age
Why MSR and TDSR Matter Before You View Homes
Many buyers begin their home search by viewing units first.
But in Singapore’s highly regulated financing system, your eligibility determines your choices — not the other way around.
Understanding MSR and TDSR helps you:
✔ Know the exact price range you can afford
✔ Avoid wasting time viewing units outside your loan limit
✔ Strategise upgrades (e.g., clearing debts to increase TDSR)
✔ Decide between HDB, EC, or private property
✔ Make confident offers knowing you can secure the required financing
Common Scenarios (And the Framework That Limits You)
Scenario 1: Young couple buying their first HDB
➡ MSR is the main barrier
Your income determines your maximum purchase price more than TDSR.
Scenario 2: EC upgrader with a car loan
➡ Both MSR and TDSR matter
Car loans reduce your TDSR headroom significantly.
Scenario 3: Single buyer purchasing a private condo
➡ TDSR only
Income level and existing debts determine the final loan.
Scenario 4: Investor planning to buy a second property
➡ TDSR is critical
Interest rate stress tests & LTV rules apply.
How to Increase Your Loan Eligibility
If you’re looking to upgrade or maximise your budget, here are legitimate methods:
✔ Reduce existing debts
Clear car loans, personal loans, or rollover credit card balances.
✔ Increase your income
Inclusion of commissions, bonuses, rental income (under specific conditions).
✔ Joint Borrowers
Spouse or co-buyer income can improve affordability.
✔ Longer Loan Tenure
Max tenure depends on property type and age, but longer tenure = lower monthly instalment = higher loan eligibility.
✔ Choose the right property type
HDB buyers are constrained by MSR, whereas private property buyers only need to pass TDSR.
Frequently Asked Questions
1. Is MSR calculated by banks or HDB?
Both use MSR rules, but application procedures differ. For HDB loans, MSR is applied under HLE; for bank loans, banks apply MSR under MAS guidelines.
2. Does MSR apply to ECs bought on the resale market?
No — only during the first 10 years from TOP.
3. Does rental income count toward TDSR?
Yes, but with a 30% haircut (only 70% of rental income is recognised).
4. What happens if I fail MSR or TDSR?
You must reduce your loan amount, lower your purchase price, increase income, or clear debts before applying again.
Understanding MSR and TDSR Helps You Buy the Right Home With Confidence
MSR and TDSR may seem technical at first, but they play a major role in shaping your property path — from buying your first BTO to upgrading to a private home or investing in multiple properties.
Before you begin house hunting, always calculate your MSR/TDSR so you know exactly what you can afford.
If you’d like help assessing your affordability or planning your next property move, Instyle Homes Singapore is here to assist.
