Property Affordability in Singapore: 5 Mistakes to Avoid
Estimates the biggest loan and property price your income supports under TDSR, using the stress-test rate banks apply. The maths is not complicated, but a handful of errors come up again and again in this and related property & hdb calculations. Here is what to watch for.
The Total Debt Servicing Ratio limits monthly debt repayments to 55% of gross monthly income for any property loan, and the Mortgage Servicing Ratio limits the housing instalment to 30% of income for HDB flats and new executive condominiums. Banks apply a medium-term interest rate in these tests rather than the rate you will actually pay.
CPF Ordinary Account savings can pay for the downpayment, stamp duties and monthly instalments, but using CPF reduces the money compounding for retirement, and the amount withdrawn plus accrued interest must be refunded to your CPF account when you sell.
1. Using the advertised interest rate for affordability
Banks apply a stress-test rate to TDSR and MSR calculations.
2. Assuming the bank will lend 75%
LTV falls to 45% for a second loan and is reduced further for long tenures or older borrowers.
3. Overlooking other costs
Legal fees, valuation, fire insurance, renovation and agent fees all add to the total outlay.
4. Ignoring SSD when selling early
Selling within four years of buying (for purchases from 4 July 2025) attracts Seller's Stamp Duty.
5. Forgetting ABSD on a second property
Citizens pay 20% ABSD on a second residential property, which can be hundreds of thousands of dollars.
The correct method
Max loan = present value of (55% × income − debts) over the tenure at the stress-test rate.
For example, with these inputs:
- Gross monthly income (S$): 12,000
- Existing monthly debts (S$): 500
- Stress-test interest rate (%): 4
- Loan tenure (years): 30
the calculator returns:
- Maximum monthly instalment: S$6,100.00
- Maximum loan (TDSR): S$1,277,713.57
- Price supported at 75% LTV: S$1,703,618.09
Related calculations
- Additional Buyer's Stamp Duty (ABSD) Calculator: Calculates ABSD by buyer profile and the number of residential properties owned, using the rates in force since 27 April 2023.
- Total Property Stamp Duty Calculator: Adds BSD and ABSD together so you know the full stamp duty bill before you sign an option to purchase.
- Seller's Stamp Duty (SSD) Calculator: Calculates SSD for residential property bought on or after 4 July 2025 and sold within four years.
- HDB Loan Calculator: Calculates monthly repayments on an HDB concessionary loan, which is pegged at 0.1% above the CPF Ordinary Account rate (2.6% a year).
The Property Affordability Calculator applies the formula consistently, so it is a quick way to double-check your own working.
Run your own numbers: Property Affordability Calculator