You’ve got your income documents, your bank statements, your valuation…and then the email comes saying your loan application is rejected. The TDSR and MSR can be shockers, especially to home buyers who purchased their property long before these rules. While it’s generally best to keep within the parameters of these servicing ratios, however, there are steps you can take if you’re going past them:

How do the TDSR and MSR affect your home loans?

The Total Debt Servicing Ratio (TDSR) applies to private properties and Executive Condominiums (ECs). Under the TDSR framework, your monthly home loan repayment – inclusive of other outstanding debts – cannot exceed 60 per cent of your monthly income. 

The Mortgage Servicing Ratio (MSR) applies to HDB properties, including ECs (this means you need to pass both the MSR and TDSR for EC purchases). The MSR restricts your monthly home loan repayment to 30 per cent of your monthly income, notinclusive of other debts.