Buying a condo in Singapore involves more than just picking the right location and layout—it also means understanding how financial regulations will affect your ability to secure a loan.
One of the most important rules to grasp is the Total Debt Servicing Ratio (TDSR). This regulation plays a huge role in determining how much you can borrow, what property you can afford, and how your long-term financial planning should be structured.
Whether you’re a first-time buyer or looking to upgrade, navigating TDSR is crucial. This guide breaks down what TDSR means, how it impacts condo purchases, and what buyers should look out for in 2025.
Key Highlights
- TDSR limits the amount of income you can spend on repaying all your loans, not just the mortgage.
- The current cap is 55% of your gross monthly income, including all debt obligations.
- Loan approvals depend heavily on your existing liabilities and loan tenures.
- TDSR applies even to private property buyers, including condos.
- Some exemptions and flexibility exist for refinancing and investment properties.
- Understanding TDSR helps you assess affordability before committing to a condo purchase.
Understanding What TDSR Actually Measures
Let’s start with the basics. The Total Debt Servicing Ratio (TDSR) is a financial framework set by the Monetary Authority of Singapore (MAS). Its purpose is to ensure that individuals do not take on more debt than they can reasonably repay.
TDSR is calculated by taking your total monthly debt obligations and dividing it by your gross monthly income. This includes:
- Home loan repayments
- Car loans
- Credit card bills
- Student loans
- Any other secured or unsecured loans
Formula:
TDSR = (Total Monthly Debt Obligations ÷ Gross Monthly Income) × 100
The cap is currently set at 55%, meaning your monthly loan repayments cannot exceed 55% of your monthly income.
This rule applies to all property loans granted by financial institutions in Singapore. It’s enforced not just for new purchases but also for refinancing loans, although some flexibility exists for borrowers who took their loans before TDSR was introduced.
Why Condo Buyers Need to Pay Close Attention
If you’re thinking about buying a private condominium, TDSR isn’t just a background rule—it actively shapes your budget. Let’s say you’re eyeing a unit in River Green, a development that offers excellent waterfront views and is becoming increasingly popular among both locals and foreigners.
Even if the price tag fits within your long-term goals, your ability to secure financing depends entirely on how TDSR plays out against your financial profile. If you have other debts—say a car loan or some monthly credit card bills—your borrowing capacity could shrink significantly, which might push your preferred property out of reach.
This is especially relevant when considering larger or premium developments where unit prices are higher. Many buyers make the mistake of only calculating their mortgage payments in isolation, without considering the full scope of their debts.
How Banks Evaluate TDSR When You Apply For a Loan
Every bank in Singapore must adhere to the TDSR framework. When you apply for a mortgage, they’ll assess your:
- Gross monthly income
- All outstanding monthly loan obligations
- Loan tenure requested
- Interest rate “stress test” (typically higher than prevailing rates to check affordability)
Banks also include a 3.5% interest rate stress test for residential properties to ensure that borrowers can still meet repayments if rates go up in the future. For non-residential properties, the stress test is often 4.5%.
What this means for you:
Even if you qualify on paper based on the selling price of a condo, the TDSR framework could still reduce the loan quantum the bank is willing to offer, unless you’re prepared to increase your down payment or choose a longer loan tenure.
Planning A Condo Purchase With TDSR In Mind
Many buyers looking at upscale developments like Springleaf Residence often assume that having a stable job and some savings is enough to secure financing. But TDSR can quickly shift those expectations, especially if your income-to-debt ratio is already strained.
Here’s how to proactively plan:
- Assess all your debts first – Even $200/month in loan repayments affects your borrowing ceiling.
- Get a mortgage assessment early – Approach a mortgage broker or bank before house-hunting.
- Calculate your maximum purchase price – Base it on your TDSR-allowed loan, not your dream condo’s price tag.
- Consider joint applications – Adding a spouse or co-borrower with income (and minimal debt) improves your ratio.
- Keep tenure flexible – Stretching the loan over 30 years (if eligible) lowers monthly repayments, improving TDSR.
Exceptions, Refinancing Rules, and Loopholes
There are limited exceptions to the TDSR rule, particularly when it comes to refinancing:
- If your property loan was taken before the TDSR framework was introduced (before 29 June 2013), you’re exempt from TDSR for refinancing—provided you meet the bank’s internal credit assessment.
- For investment properties, MAS allows property owners to refinance even if they do not meet the TDSR threshold, as long as they commit to a debt reduction plan with their lender.
These exceptions aim to reduce financial distress and prevent fire sales in a falling market. However, they do not apply to new loans or new purchases, which remain tightly regulated.
How TDSR Differs From MSR
Some buyers confuse TDSR with MSR (Mortgage Servicing Ratio). Here’s the distinction:
| Aspect | TDSR | MSR |
| Applies to | All property types (private + HDB) | Only HDB flats and ECs |
| Income considered | Gross monthly income | Gross monthly income |
| Debt types included | All loans (home, car, personal, credit cards) | Only property loan |
| Maximum cap | 55% | 30% |
For condo buyers, TDSR is the relevant rule, while MSR applies to public housing and executive condos (during their minimum occupation period).
Final Thoughts: What Buyers Should Take Away
Buying a condo in Singapore today requires a far more calculated approach than it did a decade ago. TDSR may seem restrictive at first, but it’s designed to ensure you don’t take on a home loan that could sink your finances if interest rates climb or your income shifts.
Before falling in love with a condo brochure or showflat layout, take a step back and ask yourself: what does my full financial profile look like? If your debt servicing ratio is tight, consider trimming other liabilities before you apply. Doing so could be the difference between qualifying for your ideal condo or having to scale back your expectations.
If you’re planning to buy in 2025, do yourself a favor—run the numbers with TDSR in mind before setting any property goals. That’s the most powerful financial prep you can do.
