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Navigating Mortgage Financing: A Guide to Total Debt Service Ratio (TDSR)

In our bustling city-state, where dreams of homeownership are ever-present, understanding the intricacies of mortgage financing is essential for aspiring homeowners. Among the various factors that lenders consider when evaluating mortgage applications, the Total Debt Service Ratio (TDSR) plays a crucial role in determining an individual's eligibility for a mortgage loan.

What is Total Debt Service Ratio (TDSR)?

TDSR is a financial metric used by financial institutions to assess an individual's ability to manage their debt obligations, including mortgage repayments, in relation to their income. In simpler terms, TDSR measures the percentage of an individual's gross monthly income that goes towards servicing all outstanding debts, including mortgage payments.

How Does TDSR Work in Singapore?

The Monetary Authority of Singapore (MAS) introduced the TDSR framework in 2013 to promote responsible borrowing and reduce the risk of financial instability among borrowers. Under the TDSR framework, financial institutions are required to ensure that borrowers' total monthly debt obligations, including mortgage repayments, do not exceed 55% of their gross monthly income.

Calculating TDSR

To calculate TDSR, financial institutions consider all existing debt obligations, including:

  1. Monthly mortgage payments

  2. Car loans

  3. Credit card debt

  4. Personal loans

  5. Other outstanding debt repayments

Once all existing debt obligations are accounted for, financial institutions determine the total monthly debt repayment amount and divide it by the borrower's gross monthly income. The resulting percentage is the borrower's TDSR.

Implications of TDSR

For prospective homebuyers, understanding and managing TDSR is essential when applying for a mortgage loan. Exceeding the 55% threshold set by MAS can significantly impact an individual's ability to secure a mortgage loan or affect the amount they can borrow.

Strategies for Managing TDSR

  1. Reduce Existing Debt: Prior to applying for a mortgage loan, borrowers can reduce their existing debt obligations by paying off outstanding loans or consolidating debt to lower interest options.

  2. Increase Income: Increasing one's income through salary increments, bonuses, or additional sources of revenue can improve TDSR ratios and enhance borrowing capacity.

  3. Adjust Loan Terms: Opting for longer loan tenures or choosing mortgage packages with flexible repayment options can help borrowers manage their TDSR more effectively.

  4. Minimize Debt Exposure: Avoiding unnecessary debt, such as excessive credit card spending or taking on additional loans, can prevent TDSR ratios from exceeding the prescribed limits.


In the dynamic landscape of our real estate market, understanding TDSR is paramount for prospective homebuyers seeking mortgage financing. By managing debt responsibly, adhering to TDSR guidelines, and seeking professional guidance from mortgage specialists, individuals can navigate the complexities of mortgage financing with confidence and secure their dream homes without compromising their financial well-being.

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