Explainers
 Last Revised Date: 16 December 2021

Total Debt Servicing Ratio for Property Loans

For property loans where the OTP is granted on or after 16 December 2021,  the total debt servicing ratio (TDSR) threshold is set at a maximum of 55% of the borrower's monthly income. Monthly debt obligations count towards this threshold. Exceptions exist for certain situations.

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

Calculating TDSR Thresholds

The total debt servicing ratio (TDSR) threshold for property loans is set at a maximum of 55% of the borrower’s monthly income.

Monthly debt obligations count towards calculating a borrower's TDSR. For example, if a borrower has existing monthly debt obligations equal to 10% of their monthly income, then the maximum amount they can get for a property loan is based on 45% of their monthly income.

For more on the TDSR threshold, see the guidelines on applying TDSR for property loans.

Loans Exceeding the Threshold

MAS expects property loans subject to the TDSR framework to not exceed the maximum TDSR threshold of 55%. Loans above the 55% threshold should only be granted in exceptional cases.

FIs should have processes in place to evaluate, document and report such loans. They are required to:

  • Document clearly the exceptional reasons for granting property loans above the threshold.
  • Subject these exceptional cases to enhanced credit evaluation.
  • Implement a debt reduction plan with borrowers under these exceptional cases.
  • Report all such exceptional cases to MAS.

For details of each requirement, refer to the table:

Requirement Details
Subject exceptional cases to enhanced credit evaluation
  • The policy and procedure of the overall process must be approved by the FI's board of directors. For FIs incorporated outside Singapore, local senior management can do this instead.
  • Individual cases must be approved by the FI’s credit committee.
Implement debt reduction plans (for refinancing of loans) The borrower must commit to a debt reduction plan with the FI.
Report such cases to MAS All loans exceeding the 55% threshold must be reported to MAS. At minimum, the report should include:
  • The borrower's profile (age, income, etc.)
  • Details of the loan being granted (TDSR, loan-to-value ratio, loan tenure, etc.)
  • Reasons why an exception was made.
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