Property Affordability Formula Explained, With Examples
Every property affordability result comes from one formula. Once you understand what goes into it, you can sanity-check any figure you are given, whether by an employer, a bank, a teacher or another website.
The formula
Max loan = present value of (55% × income − debts) over the tenure at the stress-test rate.
What each input means
- Gross monthly income (S$): the value you enter in the calculator.
- Existing monthly debts (S$): the value you enter in the calculator.
- Stress-test interest rate (%): the value you enter in the calculator.
- Loan tenure (years): the value you enter in the calculator.
Example
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$1,703,618.09
How the result changes
The table keeps the other inputs at their example values and changes gross monthly income (s$).
| Gross monthly income (S$) | Maximum monthly instalment | Maximum loan (TDSR) | Price supported at 75% LTV |
|---|---|---|---|
| 12,000 | S$6,100.00 | S$1,277,713.57 | S$1,703,618.09 |
| 6,000 | S$2,800.00 | S$586,491.47 | S$781,988.63 |
| 9,000 | S$4,450.00 | S$932,102.52 | S$1,242,803.36 |
| 15,000 | S$7,750.00 | S$1,623,324.61 | S$2,164,432.82 |
| 18,000 | S$9,400.00 | S$1,968,935.66 | S$2,625,247.55 |
Why it matters
Property is the largest purchase most Singaporeans make, and stamp duties, loan limits and cash requirements are front-loaded. Small mistakes in these figures can mean a shortfall at completion, so it pays to run the numbers before you commit to an option to purchase.
Most Singaporeans live in HDB flats, which can be financed with an HDB concessionary loan at 0.1% above the CPF Ordinary Account rate or with a bank loan. Private property must be financed with a bank loan, and banks offer fixed, floating and SORA-pegged packages.
Stamp duties are paid upfront. Buyer's Stamp Duty applies to every purchase at tiered rates up to 6%, while ABSD depends on the buyer's residency status and how many residential properties they already own. Sellers who dispose of a property within the holding period pay Seller's Stamp Duty.
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.
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).
Use the Property Affordability Calculator to plug in your own numbers.
Run your own numbers: Property Affordability Calculator