Answer
How to Pass the 55% TDSR — Singapore Property Loan
TDSR is the single biggest gatekeeper to your property loan. Here's the formula, what counts as debt, and five ways to get past it.
Answer: Total monthly debt repayments (home loan + car loan + credit card minimums + personal loans + any other debt) divided by gross monthly income must be ≤ 55%. Banks stress-test your home loan at 4% interest (not your actual rate). To pass: pay off debts, increase income, add a co-borrower, reduce your loan amount, or extend tenure.
The TDSR Formula
TDSR = Total Monthly Debt Obligations ÷ Gross Monthly Income ≤ 55%
If the result is above 55%, the bank cannot approve your loan. This is an MAS regulation — no exceptions, no negotiation.
What Counts as Debt
| Debt Type | How It's Counted | Example |
|---|---|---|
| Property loan (new) | Monthly repayment at 4% stress test rate | $750K loan, 30yr = $3,581/mo |
| Existing property loan | Monthly repayment at 4% stress test | $500K remaining = $2,387/mo |
| Car loan | Actual monthly instalment | $1,500/mo |
| Credit card balance | 3.5% of outstanding balance per month | $10K balance = $350/mo |
| Personal/education loan | Actual monthly instalment | $500/mo |
| Renovation loan | Actual monthly instalment | $800/mo |
Banks check your CBS (Credit Bureau Singapore) report for all outstanding debts. Even debts you forgot about will show up.
The 4% Stress Test Rate
Even if a bank offers you 2.8% interest, MAS requires the TDSR calculation to use a minimum 4% p.a. stress test rate. This is to ensure you can still afford the loan if interest rates rise.
The stress test makes a significant difference:
| Loan Amount | Tenure | Actual Rate (3.5%) | Stress Test (4%) | Difference |
|---|---|---|---|---|
| $500,000 | 25 years | $2,502 | $2,639 | +$137 |
| $750,000 | 30 years | $3,368 | $3,581 | +$213 |
| $1,000,000 | 30 years | $4,490 | $4,774 | +$284 |
5 Strategies to Pass TDSR
| # | Strategy | Impact | Effort |
|---|---|---|---|
| 1 | Pay off credit cards in full | $10K balance = $350/mo removed from TDSR | Easy |
| 2 | Clear car loan or personal loans | $1,500/mo car loan is a huge TDSR drag | Medium |
| 3 | Add a co-borrower (spouse) | Combined income increases the denominator | Easy |
| 4 | Reduce loan amount (bigger down payment) | Lower loan = lower monthly repayment | Medium |
| 5 | Extend loan tenure | 30yr vs 20yr saves ~$1K/mo on $750K loan | Easy (if age allows) |
Worked Example — Will You Pass?
Couple, age 35, buying $1.2M condo, bank loan at 75% LTV (30 years)
| Item | Monthly Amount |
|---|---|
| New property loan ($900K, 30yr, 4% stress) | $4,295 |
| Car loan | $1,200 |
| Credit card balance ($5K × 3.5%) | $175 |
| Total monthly debt | $5,670 |
| Income Scenario | Gross Income | TDSR | Result |
|---|---|---|---|
| Combined $10,000/mo | $10,000 | 56.7% | Fail |
| Combined $12,000/mo | $12,000 | 47.3% | Pass |
| $10K + pay off car & cards | $10,000 | 43.0% | Pass |
Clearing the $1,200/mo car loan and $175/mo credit card balance drops TDSR from 56.7% to 43.0% — that's the difference between rejection and approval.
Check if you pass TDSR
Enter your income, existing debts, and target property price. We'll tell you your exact TDSR ratio and whether you'll get approved.
FAQ
What is TDSR and what is the current limit?
TDSR stands for Total Debt Servicing Ratio. It is the percentage of your gross monthly income that goes to all debt repayments. MAS caps this at 55%. If your total monthly debt obligations exceed 55% of gross income, the bank cannot approve your property loan.
What interest rate do banks use for the TDSR stress test?
Banks must use a minimum stress test rate of 4% per annum (set by MAS), regardless of the actual interest rate you are offered. So even if your actual rate is 2.8%, the bank calculates your monthly repayment at 4% for TDSR purposes. This ensures you can still afford the loan if rates rise.
Do credit card bills count towards TDSR?
Yes. Outstanding credit card balances are counted as 3.5% of the total balance per month for TDSR purposes. For example, if you carry a $10,000 credit card balance, the bank adds $350/month to your debt obligations. Paying off credit card balances before applying is one of the easiest TDSR wins.
Can variable income (commission, bonus) be counted for TDSR?
Yes, but banks typically apply a 30% haircut to variable income. If your base salary is $8,000 and annual bonus averages $24,000 ($2,000/month), the bank may only count $8,000 + ($2,000 x 70%) = $9,400 as your gross income. Some banks are more conservative than others.
What happens if I fail TDSR at one bank?
You can try another bank — each bank interprets variable income and existing obligations slightly differently. However, the 55% TDSR cap and 4% stress test rate are MAS regulations that apply to all banks. If you fail at multiple banks, you need to either reduce debts, increase income, or lower your target property price.
Related
- TDSR Calculator — check your exact ratio
- TDSR Guide Singapore — full deep-dive
- Loan Tenure Age Limit — how age affects tenure and LTV
- Salary Needed for a $1M Condo
Last updated Feb 2026. TDSR limit: 55% per MAS. Stress test rate: 4% p.a. minimum. This is informational, not financial advice.