TDSR Calculation Example — Step-by-Step with Real Numbers
How much can you actually borrow? Here's the exact math banks use to decide.
Answer: TDSR limits total monthly debt payments to 55% of gross monthly income. Banks stress-test your mortgage at 4% p.a., not your actual rate. For a borrower earning $12,000/mo with a $800/mo car loan, the maximum property loan is approximately $960,000 over 25 years. Every $500/mo in existing debt reduces your max loan by roughly $105,000.
The TDSR Formula
(All Monthly Debt Payments) ÷ (Gross Monthly Income) ≤ 55%
“All Monthly Debt Payments” includes your new mortgage (calculated at 4% stress rate) plus all existing debts. “Gross Monthly Income” is your pre-tax, pre-CPF income.
Worked Example: $12,000/mo Income
Meet Alex: 32 years old, earning $12,000 gross monthly salary, with a car loan and one credit card.
Step 1: Calculate TDSR Budget
| Item | Amount |
|---|---|
| Gross monthly income | $12,000 |
| TDSR limit (55%) | $6,600 |
Alex can commit up to $6,600/mo to all debt payments combined.
Step 2: Deduct Existing Debts
| Debt | Monthly Payment | How Banks Calculate |
|---|---|---|
| Car loan | $800 | Actual monthly instalment |
| Credit card ($5,000 outstanding) | $175 | 3.5% of outstanding balance |
| Total existing debts | $975 |
Step 3: Available for Mortgage
| TDSR budget | $6,600 |
| Less: existing debts | -$975 |
| Available for mortgage | $5,625 |
Step 4: Convert to Maximum Loan
| Parameter | Value |
|---|---|
| Available monthly payment | $5,625 |
| Stress test rate (MAS) | 4.0% p.a. |
| Loan tenure | 25 years |
| Maximum loan amount | ~$960,000 |
At 4% over 25 years, every $1,000/mo of mortgage capacity translates to roughly $170,000 in loan. $5,625 × 170 = ~$956,000, rounded to $960,000.
What Property Can Alex Afford?
| Scenario | Max Loan | LTV 75% | Max Price |
|---|---|---|---|
| With car loan + credit card | $960,000 | 75% | $1,280,000 |
| No existing debts | $1,125,000 | 75% | $1,500,000 |
LTV 75% for first property, bank loan, tenure ≤ 30 years. Max price = max loan ÷ 0.75. The $975/mo in existing debts costs Alex roughly $220,000 in purchasing power.
How Existing Debts Kill Your Loan
Every dollar of monthly debt directly reduces your mortgage capacity. Here's the impact at 4% stress rate, 25-year tenure:
| Monthly Debt | Loan Reduction | Example |
|---|---|---|
| $300/mo | -$51,000 | Personal loan |
| $500/mo | -$85,000 | Student loan |
| $800/mo | -$136,000 | Car loan |
| $1,500/mo | -$255,000 | Car loan + personal loan |
| $2,000/mo | -$340,000 | Car + renovation loan |
Pro tip: pay off your car loan and credit card balances before applying for a mortgage. The improvement in borrowing power is massive.
What Counts as Income for TDSR?
| Income Type | How Banks Count It | Documentation |
|---|---|---|
| Base salary | 100% of gross | Latest 3 months payslip |
| Fixed allowances | 100% of gross | Employment letter + payslips |
| Regular bonus (AWS) | Averaged over 12 months | Employment letter confirming |
| Variable bonus / commission | 70% (30% haircut) | 2 years of payslips/IR8A |
| Rental income | 70% of gross rent | Tenancy agreement |
| Self-employed | Assessed on 2yr avg | 2 years tax returns (IR8A/IR8S) |
Joint Borrower Example: Couple
Husband earns $8,000/mo, wife earns $6,000/mo. No existing debts.
| Combined gross income | $14,000 |
| TDSR budget (55%) | $7,700 |
| Existing debts | $0 |
| Available for mortgage | $7,700 |
| Max loan (4%, 25yr) | ~$1,310,000 |
| Max property (75% LTV) | ~$1,750,000 |
Run your own TDSR numbers
Plug in your actual salary, debts, and target property price to see if you pass TDSR.
Affordability CalculatorFAQ
What is the TDSR limit in Singapore?
The TDSR limit is 55% of your gross monthly income. This means all your monthly debt obligations — mortgage, car loan, personal loan, credit card minimum payments — cannot exceed 55% of your gross income. Banks use a stress test rate of 4% (not your actual mortgage rate) to calculate the mortgage component.
What debts are included in TDSR?
TDSR includes all recurring debt obligations: property loan instalments (stress-tested at 4%), car loan payments, personal loan payments, credit card minimum payments (3.5% of outstanding balance), student loan payments, renovation loan payments, and any other instalment plans. Fixed deposits pledged to the bank may offset some debt obligations.
What income counts for TDSR?
Gross monthly income includes base salary, fixed allowances, and regular bonuses (averaged over 12 months). Variable income like commissions and overtime are accepted at a 30% haircut. Rental income from investment property is accepted at 70% of gross rent. CPF contributions from employment count as income. Self-employed borrowers must provide 2 years of tax returns.
Can I still get a loan if I fail TDSR?
If your TDSR exceeds 55%, the bank cannot approve the loan. Your options are: (1) reduce existing debts — pay off car loan or credit cards, (2) increase the down payment to reduce loan amount, (3) extend loan tenure to lower monthly payments, (4) add a co-borrower to increase total income, or (5) buy a cheaper property.
Does TDSR apply to HDB loans?
No. HDB loans use MSR (Mortgage Servicing Ratio) instead, which limits the mortgage payment to 30% of gross monthly income. Bank loans for HDB flats still use TDSR at 55%. The MSR cap is more restrictive, which is why HDB loan borrowers can typically borrow less than bank loan borrowers with the same income.
Related
Last updated Feb 2026. TDSR 55% limit and 4% stress test rate per MAS regulations. Loan estimates are approximations. This is informational, not financial advice.