TDSR Calculator Singapore: How Much Can You Borrow for a Second Property?

You have found the property. The price works. You run the numbers on gross yield and they look reasonable. Then the bank calls back and says your loan quantum is 30% lower than you expected — and now the whole deal looks different.

The Total Debt Servicing Ratio is the mechanism that produces that kind of surprise. Here is how it actually works, including the calculations that most buyers miss.

What Is the TDSR?

The Total Debt Servicing Ratio (TDSR) is a MAS-mandated cap on the maximum proportion of your gross monthly income that can be consumed by all debt repayments combined. The cap is 55%.

Every new property loan application in Singapore must pass the TDSR test. Banks are legally required to verify this. If your total monthly debt obligations — including the new mortgage — would exceed 55% of your gross monthly income, the loan is declined.

The formula is:

TDSR = Total Monthly Debt Obligations ÷ Gross Monthly Income × 100%

Total Monthly Debt Obligations includes:

• The proposed new mortgage instalment (stress-tested — more on this below)
• All existing mortgage repayments
• Car loan instalments
• Personal loan repayments
• Outstanding credit card balances (typically computed at 5% of outstanding balance per month)
• Student loan repayments

The 4.0% Stress Test: Why Your Maximum Loan Is Lower Than You Think

When the bank calculates whether your new mortgage repayment fits within TDSR, it does not use the actual floating market rate. It uses a minimum stress-test rate of 4.0% per annum, as required by MAS for residential property loans. Many banks apply an internal rate of 4.2% to 4.8%.

This means your monthly instalment — for TDSR purposes — is calculated as if you were paying 4% interest from day one, even if the actual SORA-linked rate is lower. The higher the stress-test rate, the larger the computed instalment, and the smaller the loan quantum that passes TDSR.

Example: Stress-test impact on a 25-year loan

• Loan amount: S$900,000
• Actual SORA floating rate: ~3.2% per annum
• TDSR calculation rate: 4.0% per annum
• Monthly instalment at 4.0%: approximately S$4,754
• Monthly instalment at 3.2%: approximately S$4,348
• Difference: S$406/month — which is what counts against your 55% TDSR ceiling

The 30% Variable Income Haircut

If any portion of your income is variable — sales commissions, performance bonuses, self-employed earnings, freelance income — banks must apply a mandatory 30% reduction before including it in your TDSR income calculation.

Only 70% of variable income counts.

The same 30% haircut applies to rental income from investment properties. If you are buying a second property and plan to use the rental income from the first to help qualify for the second loan, the bank will credit only 70% of the verified gross rental income into your qualifying income.

Example:

• Base salary: S$8,000/month
• Rental income from first property: S$3,500/month
• Rental income after 30% haircut: S$2,450/month
• Total qualifying income for TDSR: S$10,450/month
• Maximum total monthly debt obligations (55% of S$10,450): S$5,748

If you already have an existing mortgage of S$3,000/month, the new loan's stressed instalment must not exceed S$2,748/month — which, at a 25-year tenure and 4.0% stress rate, means a maximum loan of approximately S$521,000.

LTV Limits for Second Property Purchases

TDSR determines whether you can afford the loan. LTV limits determine how much the bank will lend relative to the property value. For second properties, both constraints apply simultaneously.

Standard Loan Tenure (≤30 years AND borrower age + tenure ≤65)

Extended Loan Tenure (>30 years OR borrower age + tenure >65)

For most investors buying a second property while still carrying a first mortgage: the LTV cap is 45%, with a 25% minimum cash down payment (not CPF — cash only).

What This Means in Practice: A Real Example

A Singapore Citizen, age 38, earns S$12,000/month in salary and has a current monthly mortgage of S$2,200. They want to buy a second condominium at S$2,000,000.

Step 1: Maximum total debt obligations 55% × S$12,000 = S$6,600/month maximum

Step 2: Available capacity for the new loan S$6,600 − S$2,200 (existing mortgage) = S$4,400/month for the new loan's stressed instalment

Step 3: Maximum loan at 4.0% stress rate, 25-year tenure Approximately S$838,000

Step 4: LTV check With one outstanding loan, maximum LTV on a S$2M property = 45% = S$900,000

Result: TDSR limits the loan to S$838,000, which is below the LTV ceiling of S$900,000. TDSR is the binding constraint.

Down payment required:

• 25% cash: S$500,000
• Remaining 30% (CPF or cash): S$600,000
• Total required before stamp duties: S$1,100,000

This is before the S$44,600 BSD and S$400,000 ABSD (20% on S$2M) that also need to be paid at transaction.

Pledging Financial Assets to Boost TDSR

MAS allows borrowers to pledge liquid financial assets to increase their qualifying income under the TDSR framework. Eligible assets include bank deposits, Singapore government securities, and local shares.

• Pledged assets held for at least 4 years: 0% haircut; counted at face value
• Unpledged liquid assets: 70% haircut, then amortized over 48 months to calculate a monthly income equivalent

For example, S$200,000 in bank deposits held for 4 years, pledged to the bank: counted as S$200,000 ÷ 48 = S$4,167/month additional income for TDSR purposes.

This mechanism can meaningfully increase the qualifying loan amount for investors who hold substantial liquid assets alongside their property portfolio.

Interest-Only Mortgages: Not Available for Residential Property

Under MAS Notice 632, interest-only residential mortgages are prohibited. Every residential mortgage must be fully amortizing — principal repayment is mandatory in every monthly instalment. The interest-only structures common in some other markets (UK, Australia) do not exist for Singapore residential property loans.

This affects cash flow planning for new launches, where some investors expected to service only interest during the construction period.

The Singapore Investment Property Guide includes a TDSR worksheet that helps you calculate your exact qualifying income, stress-test your maximum loan quantum against different property prices, and model the total cash required at purchase — including all stamp duties and down payments.

TDSR and LTV rules are set by MAS. Figures above reflect current regulatory requirements. Individual bank policies may be more conservative. Always verify your qualifying loan amount with your bank or a licensed mortgage broker.

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