Before you shop for a flat or condo, obtain an HDB Flat Eligibility (HFE) letter or an In-Principle Approval (IPA) and run your numbers against these three limits together, not in isolation.
TL;DR:
- TDSR caps total monthly debt at 55% of gross income, while variable income receives at least a 30% haircut and lenders may apply stricter checks.
- LTV caps first loans at 75%, second loans at 45%, and later loans at 35%; long tenures or repayment beyond age 65 reduce those limits.
- Your actual budget also depends on available cash and CPF; stamp duties, legal and valuation fees, maintenance, renovation, and moving costs sit outside the mortgage.
- CPF can fund downpayments and instalments within withdrawal limits; after the valuation limit, further use is capped, and amounts above the withdrawal limit require cash.
- MAS requires a 4% medium term rate floor for affordability calculations; stress test repayments two to three percentage points above your current package.
Table of Contents
- How the rules work: TDSR, MSR and LTV explained for Singapore buyers
- CPF, downpayment, stamp duties and other upfront and ongoing costs
- How to calculate what you can afford: step-by-step method plus a worked example
- Interest-rate benchmark, SORA transition and refinancing risks that change affordability
- Practical checklist: HFE/IPA, documents and questions to ask lenders
- Haio's perspective: why data-driven checks reduce surprises
- Put these rules to work with haio's affordability tools
- FAQ
- Sources
How the rules work: TDSR, MSR and LTV explained for Singapore buyers
Lenders assess affordability through a layered set of rules rather than a single ratio. Each one caps a different part of the equation, and the tightest one usually wins.
The TDSR framework caps all monthly debt obligations, including the new mortgage, car loans, credit card minimums and other instalment debt, at 55% of gross monthly income.
Where both MSR and TDSR apply, the lower ceiling governs.
LTV limits, set out in MAS's macroprudential policies, determine the maximum loan quantum as a share of the property's value: 75% first loan, 45% second for a first housing loan (subject to tenure and age adjustments), 45% for a second, and 35% for a third or subsequent loan. The limit tightens further when the loan tenure exceeds 30 years for HDB flats or 35 years for private property, or when it extends beyond the borrower's age of 65.
A few practical points worth keeping in mind:
- Banks often apply internal credit assessments stricter than the regulatory minimums, so passing TDSR does not guarantee approval.
- Variable income, such as commissions or bonuses, receives a minimum 30% haircut before it counts towards the TDSR calculation.
- Our comparison of MSR and TDSR with worked examples breaks down how the two interact for HDB buyers specifically.
CPF, downpayment, stamp duties and other upfront and ongoing costs
Clearing TDSR and LTV tells you what you can borrow, not what you can afford to buy. MoneySense advises buyers to weigh upfront cash items and ongoing homeownership costs alongside the loan ceiling, since the lowest of servicing capacity, LTV and available cash or CPF ultimately sets your real budget.
Your CPF Ordinary Account can cover part of the downpayment and monthly instalments, subject to the withdrawal limits the CPF Board sets. Once a loan reaches the Valuation Limit, further CPF use is capped, and any amount above the Withdrawal Limit must be paid in cash.
Stamp duties add a significant cash requirement. Buyer's Stamp Duty (BSD) and, where applicable, Additional Buyer's Stamp Duty (ABSD) are chargeable at purchase and vary with buyer profile and property price, as set out by the Inland Revenue Authority of Singapore. These sums are typically payable in cash or CPF within a fixed window after signing the sale and purchase agreement.
Other items to budget for:
- Legal conveyancing fees, typically a fixed engagement cost separate from the loan.
- Valuation fees charged by the bank's appointed valuer before loan disbursement.
- Initial maintenance fees, renovation costs and moving expenses, which sit outside the mortgage entirely.
A buyer who clears TDSR comfortably but lacks the cash or CPF for BSD, legal fees and the cash portion of the downpayment still cannot proceed and may need to delay the purchase or adjust the target price downward.
How to calculate what you can afford: step-by-step method plus a worked example
Turning the rules into a number you can shop with takes five steps:
- Gather your gross monthly income, existing monthly debt repayments, CPF Ordinary Account balance, intended loan tenure and whether any income is variable.
- Apply the 30% haircut to variable income components before adding them to gross income.
- Multiply total gross monthly income (after haircut) by the regulatory TDSR cap and subtract existing debt repayments to find your maximum permitted mortgage instalment under TDSR.
- Convert that instalment into a loan quantum using the medium-term interest-rate floor of 4%, as MAS requires for this calculation, over your chosen tenure.
- Apply the relevant LTV tier to the loan quantum to find the minimum downpayment, split between cash and CPF.
Say a buyer earns $8,000 gross monthly with no variable income and $500 in existing car loan repayments, applying for a 30-year tenure on a first housing loan. This illustrative case shows how the TDSR ceiling, not the property price, usually sets the starting point for the calculation.
Interest-rate benchmark, SORA transition and refinancing risks that change affordability
Singapore dollar home loans now price off the Singapore Overnight Rate Average (SORA) rather than the retired SOR and SIBOR benchmarks. MoneySense's guidance on the SORA transition explains that SORA is a compounded, backward-looking rate, and borrowers who switched packages should compare the new spread, lock-in period and any conversion costs carefully.
Banks typically price SORA packages as the compounded rate plus a fixed spread, with lock-ins of one to three years. Refinancing after a lock-in period ends triggers a fresh TDSR assessment at the prevailing medium-term floor, though owner-occupiers refinancing an existing property sometimes qualify for exemptions from certain cooling measures. Our guide to fixed versus floating SORA modelling walks through how each structure behaves as rates move.
Pro Tip: Stress-test your monthly instalment at a rate two to three percentage points above your current package before committing, so a rate rise after a fixed-rate promo ends does not catch your budget off guard.
Practical checklist: HFE/IPA, documents and questions to ask lenders
Before you view flats or condos seriously, work through this sequence:
- Apply for an HDB Flat Eligibility letter through the HDB Flat Portal if you are buying an HDB flat, or request an IPA from a participating bank for private property; both have a defined validity period and can be invalidated by changes to your household or income.
- Prepare payslips, CPF statements, recent bank statements, asset statements and proof of any other loan repayments.
- Ask each lender for the effective interest rate, lock-in duration, penalty fees and a rate-change illustration, all of which should appear on the property loan fact sheet.
- Set aside a contingency buffer for rate increases and the initial maintenance or renovation costs that fall outside the loan.
Haio's perspective: why data-driven checks reduce surprises
Headline ratios tell part of the story. CPF withdrawal limits, variable income haircuts and the medium-term interest-rate floor each shift the real number in ways a single percentage cannot capture. Combining official MAS and HDB rules with local transaction data and SORA modelling produces a more realistic affordability outcome than running the ratios by hand. Even so, a personalised check is a planning tool, not a substitute for verifying eligibility with HDB or MAS directly, and it is worth refreshing before any firm commitment.
— HAIO
Put these rules to work with haio's affordability tools
Running TDSR, MSR and LTV together by hand is fiddly, especially once CPF limits and variable income haircuts enter the picture. Our Affordability tool applies these rules to your actual income and debt profile, alongside SORA modelling and valuation data drawn from recent transactions, so you get a realistic price band rather than a rough guess. Start with a free check, then move to haio+ at S$49 per month or S$499 per year (details on the haio+ page) for deeper valuation reports and Master Plan analysis before you apply for your HFE or IPA.
FAQ
Do mortgage lenders still do affordability checks?
Yes. Every financial institution in Singapore is required to run the TDSR calculation, and MSR where it applies, before approving a housing loan, using the medium-term interest-rate floor set by MAS. Banks may also layer their own internal credit checks on top of these regulatory minimums.
Will mortgage rates go down in Singapore in 2026?
Rate direction depends on where SORA settles, and no source gives a confirmed forecast for future years. The safer approach is stress-testing your repayment at a rate materially higher than today's package rather than assuming a particular direction.
How much can I borrow if I earn $30,000 a year?
This article's worked example uses an $8,000 monthly income to show the calculation steps; the same method applies at any income level by substituting your own gross monthly figure into the TDSR formula described above. Run your own numbers through the Affordability tool rather than relying on a single annual figure, since existing debts and tenure change the outcome significantly.
What salary is needed to live comfortably in Singapore?
No source in this article sets a single comfortable-living salary figure, since it depends on household size, housing type and lifestyle. What matters for mortgage planning specifically is keeping your TDSR and, where applicable, MSR within the regulatory caps while leaving room for other living costs.
Sources
- Buying a property: How much can you afford? | MoneySense
- Total debt servicing ratio for property loans | MAS