Paper 2 · Property Finance & Financial Calculations · 15 min read
Property Financing in Singapore: LTV, TDSR & MSR
Practise this section (223 questions) → · 4.8 Property finance and financial calculations, in sets of about 30
Must-know for the exam
- MAS caps a first bank loan at 75% LTV (5% cash), a second at 45% and a third at 35% (25% cash); tenure is capped at 35 years, 30 for HDB flats.
- LTV falls to 55%, 25% or 15% if the tenure exceeds 30 years (25 for HDB) or extends past age 65; first-loan minimum cash then rises to 10%.
- The HDB concessionary loan LTV was cut from 80% to 75% on 20 Aug 2024, and its 25% downpayment may come wholly from CPF Ordinary Account with no minimum cash.
- Under MAS rules, TDSR caps all monthly debt repayments, including car loans and credit cards, at 55% of gross monthly income and applies to every property type.
- MSR caps the housing loan at 30% of gross monthly income for an HDB flat or an EC still within its MOP; private property and a resale EC face TDSR only.
- Banks size the instalment at MAS's medium-term floor of 4% (5% non-residential) from 30 Sep 2022; an In-Principle Approval is a non-binding guide, not a guaranteed loan.
- The CPF Board's Valuation Limit is the lower of price or valuation at purchase; the Withdrawal Limit is 120% of it and needs the Basic Retirement Sum set aside.
- CPF OA may pay the downpayment above the cash minimum, instalments, stamp duty and legal fees, but never property tax, service and conservancy charges or renovation.
- On sale, CPF used is refunded with accrued interest at the OA rate; below 55 it returns to the OA, from 55 it first tops up the Retirement Account.
- CPF use up to the VL needs the lease to cover the youngest CPF-using owner to age 95; it is pro-rated below that, and barred if under 20 years remain.
On this page · 8 sections
Three rules decide how much a buyer can borrow from a bank. The exam tests which applies where and how they interact. Each figure below carries the date MAS (or HDB) set it, because the percentages are policy levers that move with cooling measures.
1. LTV — how much you can borrow against the value
Loan-to-Value (LTV) caps the loan as a % of the property price/value; the rest is your downpayment (part of which must be cash). LTV drops sharply for a second/third loan, and is also reduced if the loan tenure is long or extends past age 65.
| Loan | Max LTV | Min cash |
|---|---|---|
| 1st housing loan | 75% (or 55%) | 5% (10% if 55%) |
| 2nd housing loan | 45% (or 25%) | 25% |
| 3rd+ housing loan | 35% (or 15%) | 25% |
The HDB concessionary loan is a separate LTV. It was cut from 80% to 75% on 20 Aug 2024, so it now matches the bank first-loan cap — but the cash treatment differs: the 25% downpayment on an HDB loan may be paid entirely from CPF Ordinary Account (no minimum cash), whereas a 75% bank loan requires at least 5% in cash. Quoting the old 80% is a stale-figure trap.
| Loan | Longest tenure | Source |
|---|---|---|
| Bank loan, private or other non-HDB property | 35 years | MAS |
| Bank loan for an HDB flat | 30 years | hdb.gov.sg, Housing Loan from Financial Institutions, read 1 Oct 2026 |
| HDB concessionary loan | Shortest of 25 years, 65 minus the applicants' average age, and the remaining lease minus 20 years | hdb.gov.sg, Housing Loan from HDB, read 1 Oct 2026 |
- Every outstanding housing loan counts, whichever lender holds it. A buyer still paying off an HDB loan takes the second-loan tier (45%) on a new bank loan.
- Bank LTV falls further on a 32-year tenure, even for a 30-year-old: the tenure test and the age-65 test are separate triggers, and either one alone moves the loan to the 55% tier.
- A company is not an individual. A bank may lend an entity at most 15% of the price or value (MAS), on top of the 65% entity ABSD.
The trap
LTV runs on the lower of price or valuation; BSD and ABSD run on the higher. Price $1,000,000, valuation $950,000 → the 75% first loan is $712,500, not $750,000, and the $50,000 gap is cash on top of the normal downpayment — the bank will not lend against it and CPF is capped at the lower figure.
2. TDSR vs 3. MSR
Which loan limit applies to this property?
Comparison of loan limits for three kinds of property. TDSR, total debts at most 55 percent of gross monthly income, applies to bank loans for all three. MSR, property loans at most 30 percent of income, applies to an HDB flat and to an EC still in its minimum occupation period, but not to a resale EC past its MOP or private property. The HDB concessionary loan, at 75 percent loan-to-value, is available only for HDB flats. Bank loan-to-value is 75, 45 or 35 percent by the number of outstanding housing loans, falling to 55, 25 or 15 percent for long tenures or loans past age 65; the tenure threshold is 25 years for HDB flats and 30 years otherwise.
HDB flat
- TDSR: all monthly debts ≤ 55% of income
- Yes, on a bank loan. An HDB loan is not under TDSR
- MSR: property loans ≤ 30% of income
- Yes. An HDB loan has its own 30% instalment cap
- HDB concessionary loan
- If eligible: up to 75% of the lower of price or value
EC still in its MOP
In practice, bought new from the developer
- TDSR: all monthly debts ≤ 55% of income
- Yes
- MSR: property loans ≤ 30% of income
- Yes
- HDB concessionary loan
- No: bank loan only
Resale EC past MOP, or private property
- TDSR: all monthly debts ≤ 55% of income
- Yes
- MSR: property loans ≤ 30% of income
- No: TDSR only
- HDB concessionary loan
- No
The same for every option
- Bank LTV by outstanding housing loans (0 / 1 / 2+)
- 75% / 45% / 35%. Falls to 55% / 25% / 15% if the tenure passes age 65 or exceeds 30 years (25 years for an HDB flat).
- Minimum cash downpayment (bank loan)
- 5% on a 75% first loan (10% at 55%); 25% on a second or later loan.
Source: MAS, MSR and TDSR Rules (TDSR 55% from 16 Dec 2021) and Loan Tenure and LTV Limits (OTPs from 6 Jul 2018); MAS media release 11 Jan 2013 (MSR 30% on bank loans from 12 Jan 2013); HDB, Housing Loan from HDB (75% LTV for resale applications from 20 Aug 2024; instalments up to 30% of income). Checked 1 Oct 2026.
| TDSR | MSR | |
|---|---|---|
| Caps | All monthly debt (loans, cards, car) | Only the housing loan |
| Limit | 55% of gross monthly income (tightened from 60% on 16 Dec 2021) | 30% of gross monthly income (since Jan 2013) |
| Applies to | All property types | HDB flats, and an EC still within its minimum occupation period (in practice, one bought from the developer) |
Read that last row precisely — "ECs" is not the whole answer. MAS applies MSR to an HDB flat or an EC whose minimum occupation period has not expired (MAS, MSR and TDSR rules, revised 16 Dec 2021). In practice that is a new EC bought from the developer, because an EC cannot be sold on the open market until its MOP ends. A resale EC bought on the open market is financed like private property: TDSR only, no MSR. Same development, same buyer — a different ceiling depending on whether the unit came from the developer or from a previous owner.
Both use a stress-test interest rate (a 'medium-term' rate higher than the actual loan rate) when computing the monthly instalment. An In-Principle Approval (IPA) indicates how much a bank is likely to lend — but it is not a guaranteed loan.
The stress rate has a number. MAS sets a medium-term interest-rate floor of 4% for residential property loans and 5% for non-residential, applying to purchases where the Option to Purchase was granted (or, with no option, the S&P was dated) on or after 30 Sep 2022 (MAS, checked 1 Oct 2026). The bank sizes the notional instalment at the floor even when the package rate is far lower, so the floor, not the promo rate, decides how much TDSR and MSR let you borrow.
- Income haircut. Variable income — bonuses, commissions, rental, self-employed earnings — is cut by 30% before either ratio is applied: only 70% of it counts (MAS TDSR framework, in force since 29 Jun 2013).
- Financial assets count as income, after a haircut. Assets pledged with the bank for 4 years or more count in full (cash) or at 70% (bonds, shares, unit trusts). Unpledged assets, or assets pledged for under 4 years, count at only 30%. Either way the recognised amount is spread over 48 months (MAS Notice 645, para 20).
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Quick self-check · 5 questions
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Say your answer out loud, then tap to check it.
What are the maximum LTV and minimum cash for a first bank housing loan, and when does the lower tier apply?Show answer
75% LTV with at least 5% cash, or 55% with 10% cash where the tenure exceeds 30 years (private) or 25 years (HDB flat), or runs past age 65 (Options from 6 Jul 2018).
What do TDSR and MSR cap, at what levels, and to which properties does MSR apply?Show answer
TDSR caps all monthly debt repayments at 55% of gross monthly income, for all property loans. MSR caps monthly property-loan repayments at 30%, only for HDB flats and ECs bought new from the developer within the MOP.
Price $1,000,000, valuation $950,000. What is the maximum 75% first bank loan?Show answer
$712,500, because LTV runs on the lower of price or valuation (75% × $950,000). The $50,000 gap is extra cash; BSD and ABSD run on the higher figure.
How much variable income counts for TDSR, and what stress-test rate is used for residential loans?Show answer
70% of variable income such as bonuses or commission (30% haircut). The instalment is sized at a 4% medium-term floor for residential loans, for Options granted from 30 Sep 2022.
A condo is bought and valued at $1,000,000. What are the CPF Valuation Limit and Withdrawal Limit?Show answer
VL $1,000,000 (lower of price or valuation at purchase) and WL $1,200,000 (120% of VL). CPF beyond the VL needs the Basic Retirement Sum set aside; past the WL, instalments are cash.
Common questions
- Does MSR apply to private property in Singapore?
- No. The Mortgage Servicing Ratio applies only to HDB flats and to an Executive Condominium bought directly from the developer. Private property — and a resale EC bought on the open market — is assessed under TDSR and LTV limits instead (MAS).
- What is the difference between TDSR and MSR?
- TDSR caps your total monthly debt (all loans) against income and applies to all property types; MSR caps only the housing loan against income and applies only to HDB flats and to an EC bought directly from the developer. A resale EC is therefore TDSR-only, like private property.
- What are the CPF Valuation Limit and Withdrawal Limit?
- They cap how much of your own CPF can go into a property, separately from the bank's LTV. The Valuation Limit is the lower of the purchase price or the valuation at the time of purchase, and CPF may be used up to it. The Withdrawal Limit is 120% of the Valuation Limit — CPF may only be used beyond the VL, up to the WL, if you have set aside the Basic Retirement Sum, after which instalments must be paid in cash. Both cover the downpayment plus every monthly instalment, and how much CPF can be used at all also depends on the remaining lease (CPF Board, rules since 10 May 2019).
Related lessons
- OTP Singapore: Option to Purchase Fee, Period & Exercise
- Stamp Duties Explained: BSD, ABSD & SSD (Singapore, 2026)
- Executive Condominiums (ECs): MOP, Privatisation and the May 2026 Changes
- Fee Simple vs Estate in Perpetuity vs 99-Year Leasehold
- HDB Fire Insurance & Home Protection Scheme (HPS) Explained
- Property Valuation: The 5 Methods (with worked examples)
- Home Loan Rate Types & Refinancing (fixed, floating, SORA)
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