Maximum Loan Eligibility Calculator (TDSR)
Understanding Maximum Loan Eligibility
Find out about the Maximum Loan Eligibility with this calculator.
The Total Debt Servicing Ratio (TDSR) was implemented in 2013 by the Monetary Authority of Singapore.
This framework is to ensure that borrowers will not be over-leveraged in their borrowings.
TDSR stipulates that borrowers can borrow up to 60% of disposal income after taking into account other personal loans such as credit card payments and car loans.
For example, if the borrower’s monthly income is $6,000 and has a $1,000 car loan commitment, the income used to calculate the maximum loan eligibility is ($6,000 – $1,000) * 60% = $3,000.
Another reason for the implementation of TDSR is to turn property speculation. By tightening the ease to borrow money for property purchases, the government of Singapore is able to have better control over the steep rise in property prices.
TDSR is applicable to private property loans only and does not apply to commercial property loans nor HDB loans. Also, TDSR applies to housing loans made after its implementation in 2013 and borrowers who took on a housing loan prior to its implementation date can refinance their loans without TDSR requirements.
For more information, check out https://www.mas.gov.sg/regulation/explainers/tdsr-for-property-loans/calculating-tdsr