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Home Loan Eligibility Guide

Discover Your Ideal Loan Amount: Ultimate Home Loan Eligibility Calculator in Singapore

A home loan eligibility calculator evaluates your potential to secure a mortgage by analysing your income and financial obligations. It determines the maximum loan amount you are likely to qualify for, based on crucial factors such as your monthly income, existing debts, and overall financial responsibilities.

Essential for effective financial planning, this calculator offers a comprehensive forecast of your eligible loan amount. It assists in devising a balanced budget, ensuring your housing decisions are financially sustainable. Ultimately, it serves as a foundational tool in financial planning, providing a detailed view of how well your potential housing investment aligns with your financial state.

What Determines Your Home Loan Eligibility?

When applying for a home loan in Singapore, it's not just about how much you earn — it's also about how much of your income is already committed to existing financial obligations. This is where two key regulatory frameworks come in:

Mortgage Servicing Ratio (MSR)

Limits housing loan payments to 30% of gross monthly income

Applies to HDB flats and ECs
Ensures mortgage affordability
Prevents over-borrowing

Total Debt Servicing Ratio (TDSR)

Caps total debt obligations at 55% of gross monthly income

Applies to all property types
Considers all debt obligations
Ensures overall financial health

Both frameworks are enforced by the Monetary Authority of Singapore (MAS) to promote responsible borrowing. Together, they play a critical role in determining the maximum loan amount you're eligible for.

Understanding Loan Eligibility Ratios

When applying for a home loan in Singapore, two key regulatory frameworks determine your eligibility:

Mortgage Servicing Ratio (MSR)

The Mortgage Servicing Ratio (MSR) is a regulatory guideline set by the Monetary Authority of Singapore (MAS) to ensure responsible borrowing for residential property purchases. It limits the portion of your monthly income that can be used to service your home loan to 30%. This applies specifically to loans for Housing and Development Board (HDB) flats or Executive Condominiums (ECs) purchased directly from developers.

MSR Example Calculation

For example, if your gross income is $6,000, your maximum allowed monthly repayment under MSR would be:

30% × $6,000 = $1,800

This means your home loan repayment must not exceed $1,800/month.

Total Debt Servicing Ratio (TDSR)

Total Debt Servicing Ratio (TDSR) provides a more comprehensive view of your financial commitments. Introduced by MAS to promote financial prudence, TDSR caps the total amount of your monthly debt obligations—including your home loan, car loans, credit card payments, and other liabilities—at 55% of your gross monthly income. This applies to all property loans in Singapore, including private properties and refinanced HDB loans.

TDSR Example Calculation

If you earn $6,000 a month, your total monthly debt repayments — across all loans — must not exceed:

55% × $6,000 = $3,300

If you're already paying $1,000 toward other debts, your housing loan repayment must stay below $2,300 to stay within the TDSR cap.

How MSR and TDSR Work Together in Your Loan Eligibility

While the Mortgage Servicing Ratio focuses solely on your mortgage payment for HDB or EC properties, the Total Debt Servicing Ratio evaluates your entire debt portfolio. Together, they form a dual-layered approach to determine your loan eligibility in Singapore:

MSR Compliance: Ensures your mortgage payment for an HDB flat or EC stays within 30% of your income.
TDSR Compliance: Confirms that all your debt obligations, including the mortgage, remain below 55% of your income.

Our home loan eligibility calculator seamlessly integrates both the MSR and TDSR requirements, providing a precise and compliant estimate of your maximum loan amount. This dual assessment helps you avoid over-borrowing and ensures your housing investment fits within Singapore's regulatory framework.

Why Both MSR and TDSR Matter

When securing a home loan in Singapore, understanding the Mortgage Servicing Ratio (MSR) and Total Debt Servicing Ratio (TDSR) is essential. These two regulatory measures, set by the Monetary Authority of Singapore (MAS), work together to ensure responsible borrowing and long-term financial stability. While they overlap for certain property types, their distinct roles make them equally critical in shaping your loan eligibility.

MSR: Protecting Mortgage Affordability

The Mortgage Servicing Ratio (MSR) caps your monthly mortgage payment at 30% of your gross monthly income, but it only applies to HDB flats and Executive Condominiums (ECs) purchased directly from developers. Its primary purpose is to ensure that your mortgage remains affordable, preventing you from taking on a loan that could overwhelm your budget.

For example, with a monthly income of SGD 5,000, your mortgage payment cannot exceed SGD 1,500—keeping your housing costs manageable.

TDSR: Ensuring Overall Debt Sustainability

The Total Debt Servicing Ratio (TDSR) takes a wider view, limiting your total monthly debt obligations—including your mortgage, car loans, and other liabilities—to 55% of your gross monthly income. Applicable to all property loans in Singapore, TDSR ensures you can sustain all your financial commitments, not just your mortgage.

For instance, if your income is SGD 8,000 and you have SGD 1,000 in existing debts, your mortgage payment is capped at SGD 3,400 to stay within the TDSR limit of SGD 4,400.

Complementary Roles in Loan Eligibility

While MSR focuses solely on your mortgage for HDB or EC purchases, TDSR evaluates your entire debt portfolio. This dual framework matters because:

Targeted Protection: MSR safeguards HDB and EC buyers from overextending on housing costs, a critical concern given their affordability focus.
Holistic Oversight: TDSR prevents over-borrowing across all debts, ensuring you maintain financial flexibility regardless of property type.
Combined Impact: For HDB or EC loans, both limits apply, and the stricter one governs. If your other debts push you beyond TDSR's 55% cap, your eligible loan amount shrinks—even if it meets MSR.

MSR vs. TDSR: Key Differences

While both MSR and TDSR aim to promote financial prudence, they serve distinct purposes:

Feature	MSR (30%)	TDSR (55%)
Focus	Home loan payments only	All debt obligations
Applies to	HDB flats and ECs only	All property types
Purpose	Ensures housing debt is manageable	Ensures overall debt is sustainable
Limit	30% of gross monthly income	55% of gross monthly income

For HDB or EC buyers, both MSR and TDSR apply, but TDSR takes precedence if your other debts push your total obligations beyond the 55% threshold. A well-designed home loan eligibility calculator accounts for both metrics to provide a compliant and accurate loan estimate.

How to Improve Your Home Loan Eligibility

If your estimated loan amount is lower than expected, consider these practical tips:

Reduce Other Debts

Paying down credit cards or personal loans can free up your TDSR ratio.

Add a Co-borrower

Combining incomes with a spouse or family member can raise your loan ceiling.

Opt for a Longer Loan Tenure

Spreading repayments over more years lowers your monthly obligations.

Avoid Taking On New Loans

Lenders will evaluate your existing commitments strictly.

Frequently Asked Questions About Home Loan Eligibility Calculator in Singapore

What is Total Debt Servicing Ratio (TDSR)?

The Total Debt Servicing Ratio (TDSR) is a regulatory framework implemented by financial institutions in Singapore to evaluate a borrower's ability to repay loans. It measures the proportion of a borrower's gross monthly income that goes towards servicing all current and prospective debt obligations. This includes payments for mortgages, car loans, personal loans, and credit card debts. The TDSR ensures that individuals borrow within safe limits, promoting responsible financial management and preventing excessive debt.

What is the maximum Total Debt Servicing Ratio (TDSR)?

The maximum Total Debt Servicing Ratio (TDSR) is set by regulatory guidelines in Singapore, capping the amount of a borrower's gross monthly income that can be used for debt repayment at 55%. This limit helps ensure that individuals stay within their financials, maintaining a balance between their earnings and their debt obligations. Adhering to the maximum TDSR is crucial for securing loan approvals and achieving long-term financial stability. Using a TDSR calculator can assist you in assessing your financial position and ensuring compliance with these guidelines.

What is the difference between TDSR and Mortgage Servicing Ratio (MSR)?

While the Total Debt Servicing Ratio (TDSR) encompasses all debt obligations of a borrower, the Mortgage Servicing Ratio (MSR) is specifically targeted at property loans. The MSR is particularly relevant for those purchasing Housing Development Board (HDB) flats and executive condominiums directly from developers, as it caps the percentage of a borrower’s gross monthly income that can be spent on housing loans at 30%. This distinction ensures that housing expenses remain manageable and do not jeopardise overall financial stability.

What is the TDSR formula?

The Total Debt Servicing Ratio (TDSR) formula can be calculated as follows:

TDSR = (Borrower’s Total Monthly Debt Obligations / Borrower’s Gross Monthly Income) × 100%

How much do I need to pay for Buyer Stamp Duty?

Buyer Stamp Duty (BSD) is a tax levied on the purchase of property in Singapore. The amount payable is based on the property's purchase price or market value, whichever is higher.

The current BSD rates for residential properties are tiered as follows:

1% for the first $180,000
2% for the next $180,000
3% for the next $640,000
4% for the next $500,000
5% for the next $1,500,000
6% for the remaining amount

For non-residential properties, the rates are:

1% for the first $180,000
2% for the next $180,000
3% for the next $640,000
4% for the next $500,000
5% for the remaining amount

Understanding these rates is crucial for accurately estimating the additional costs associated with your property purchase and ensuring your financial planning accounts for all necessary expenses. A loan eligibility calculator can help you manage these calculations and plan effectively.

What are the home loan eligibility criteria in Singapore?

Home loan eligibility in Singapore is primarily determined by several key factors. These include your TDSR, which should not exceed 55%, credit history, age, income stability, and other financial commitments. Additionally, banks consider the loan-to-value (LTV) ratio, which is capped at 75% of the property's value or purchase price, whichever is lower. Meeting these criteria is essential for securing a home loan.

How does tenure affect LTV?

The amount of home loan you can get is primarily determined by the loan-to-value (LTV) ratio. This ratio indicates the maximum mortgage loan a bank can extend to you as a percentage of the property's value or purchase price, whichever is lower.

For a first private property, you can typically borrow up to 75% of the property's value if the loan term is 30 years or less and does not extend beyond age 65. You have the option to stretch the loan tenure to 35 years or extend it to age 75; however, the LTV ratio cap decreases to 55%.

For a first HDB property, you can typically borrow up to 75% of the property's value if the loan term is 25 years or less and does not extend beyond age 65. You have the option to stretch the loan tenure to 30 years or extend it to age 75; however, the LTV ratio cap decreases to 55%.

Understanding your LTV ratio is useful in determining the loan amount you can afford, and using a home loan eligibility calculator can provide valuable insights.

What factors need to be considered in TDSR calculation?

When calculating the Total Debt Servicing Ratio (TDSR), several important factors are considered:

Debt Obligations: This includes all your existing debts, such as car loans, personal loans, and other mortgages.
Income Level: Fixed and variable income components, like bonuses or commissions, are assessed.
Internal Stress Test: Banks apply a "stress test" to ensure that your repayment capacity remains within TDSR limits, stress tests are impacted by market conditions.
Variable Income Adjustment: For self-employed individuals with variable income, a 30% haircut is applied to account for income variability.
Joint Applications: When applying jointly, the income-weighted average age (IWAA) of both borrowers is used to determine the maximum loan tenure.

Understanding these factors is essential for accurately determining your borrowing capacity and ensuring that your debt remains manageable.

What should I do if I exceed the 55% TDSR?

If your TDSR exceeds 55%, it is crucial to take steps to reduce your debt or increase your income. Paying off some loans can help lower your total debt obligations, while seeking additional income sources can improve your TDSR. Consulting with mortgage advisors, such as those at The Loan Connection, can provide you with tailored strategies to enhance your loan eligibility and achieve a more manageable debt-to-income ratio.

How accurate are the results of the loan eligibility calculator?

While the home loan eligibility calculator in Singapore provides a reliable estimate, it is important to consult a mortgage advisor for a comprehensive assessment. Mortgage advisors can offer personalised advice tailored to your financial situation, whether you need to refinance an HDB loan or secure a private house loan. This ensures you make the most informed borrowing decisions.

How can I schedule my repayments?

Effectively scheduling your repayments involves clearly understanding your cash flow and utilising tools like amortisation schedules to plan your payments. Regularly reviewing your repayment plan is advisable to adjust for any changes in income or expenses, ensuring that you stay on track with your financial commitments.

What is a credit score?

A credit score is a numerical measure used by banks to evaluate your creditworthiness. It significantly influences loan approval decisions and the interest rates offered to you. Maintaining a good credit score is not just important, it's essential for securing favourable loan terms and demonstrates responsible financial management.