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Buyers5 min read

How much a bank will lend you

TDSR, the LTV limits, the stress-test rate, and the rules on using CPF — the four things that decide your budget.

Four rules between them decide your loan. They interact, which is why the answer is rarely the one people expect.

1. TDSR: 55% of your income

caps all your monthly repayments — the new mortgage plus car loans, personal loans, student loans and credit-card minimums — at 55% of gross monthly income. Only 70% of bonus and other variable income counts.

Paying off a car loan before you apply can raise your borrowing capacity by several hundred thousand dollars.

2. The stress-test rate

Banks do not test that 55% against the rate they offer you. They must use a floor set by MAS, currently 4.0% for private property, so the loan still works if rates rise. Shopping for a cheaper rate lowers what you pay, but not what you can borrow.

3. LTV: how much of the price they will cover

caps the loan at 75% of the price for a first housing loan, with at least 5% of the price in cash and the rest of the down payment from cash or CPF. With one housing loan already outstanding it drops to 45%, and 35% beyond that — with 25% of the price required in cash.

The 75% falls to 55% if the loan runs more than 30 years, or if it would still be running when you turn 65. A longer tenure lowers the monthly payment but can cost you a fifth of the loan — the calculator shows when this is biting and what tenure avoids it.

Maximum tenure on private residential property is 35 years.

4. What CPF can and cannot do

  • CPF Ordinary Account money can go towards the down payment, beyond the cash minimum, and towards monthly repayments.
  • It cannot cover the minimum cash portion, and it generally cannot pay at the point of purchase.
  • On a resale home you can usually pay stamp duty from CPF. On a new launch you pay cash first and reimburse yourself afterwards.
  • CPF use is restricted where the remaining lease will not last until the youngest buyer turns 95 — see freehold or leasehold and CPF's own guide.
  • Money taken from CPF must be returned to CPF, with the interest it would have earned, when you sell.
Get an Approval in Principle before you view seriously. It is free, takes a day or two, and turns all of the above into one number you can act on. Our affordability calculator gets you close enough to plan with.