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 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.
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:
Subject exceptional cases to enhanced credit evaluation
|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: