RES exam question on Financing: monthly debt could each carry under TDSR
Kumar and Siew Ling each earn a fixed $10,000 a month with no other debts. Kumar was granted an Option to Purchase for a condominium on 14 Dec 2021, Siew Ling on 17 Dec 2021. Both applied for bank loans on 20 Dec 2021. What monthly debt could each carry under TDSR?
- ABoth $5,500 less their CPF contributions, as TDSR is measured against take-home pay
- BBoth $5,500, because both loan applications were made after the new threshold took effect
- CBoth $6,000, because the lower threshold applied to Options granted from 1 Jan 2022 onwards
- DKumar $6,000 and Siew Ling $5,500, as the date each Option was granted decides
Show answer & explanation
Answer
D. Kumar $6,000 and Siew Ling $5,500, as the date each Option was granted decides
Explanation
Answer: Kumar $6,000 and Siew Ling $5,500. The date each Option was granted decides the threshold.Working:1. Kumar's OTP of 14 Dec 2021 predates the change: 60% x $10,000 = $6,000.2. Siew Ling's OTP of 17 Dec follows it: 55% x $10,000 = $5,500.Rule: TDSR caps monthly debt at 60% of gross income, or 55% where the OTP was granted on or after 16 Dec 2021. For a purchase the OTP date decides; without an OTP, the loan application date does.Source: MAS, TDSR Thresholds for Property Loans, mas.gov.sg, read 1 Oct 2026
Why the other options are wrong
- Both $5,500 less CPF: TDSR uses gross monthly income; CPF contributions are not deducted.
- Both $5,500, by loan date: For a purchase the OTP date governs, not the loan application date.
- Both $6,000, cut-off 1 Jan 2022: The lower threshold covers OTPs from 16 Dec 2021, so it catches Siew Ling.
Study the concept behind this question: Property Financing in Singapore: LTV, TDSR & MSR
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