Explainers
 Last Revised Date: 16 December 2021

Rules for New Housing Loans

When extending a housing loan, financial institutions (FIs) should ensure that borrowers are within the thresholds for mortgage servicing ratio and total debt servicing ratio.

Applies to: Full Bank (Locally Incorporated) , Full Bank (Branch) , Finance Company , Merchant Bank (Locally Incorporated) , Merchant Bank (Branch)

MSR Rules

Mortgage servicing ratio (MSR) refers to the portion of a borrower’s gross monthly income that goes towards repaying all property loans, including the loan being applied for.

MSR is capped at 30% of a borrower's gross monthly income.

It applies only to housing loans for the purchase of an HDB flat, or an executive condominium where the minimum occupation period of the executive condominium has not expired.

Calculating MSR

When calculating MSR, FIs are to take into consideration:

  • All the borrower’s property loans.
  • At least 20% of the monthly debt obligation for any property loan where the borrower is a guarantor.

To calculate a borrower’s MSR, use the following formula:

(Monthly repayment instalments for all property loans / Gross monthly Income) x 100% ≤ 30%

TDSR Rules

Total debt servicing ratio (TDSR) refers to the portion of a borrower’s gross monthly income that goes towards repaying the monthly debt obligations, including the loan being applied for.

A borrower's TDSR should be less than or equal to 55%.

Find out about TDSR rules and calculation.

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