Mortgage servicing ratio (MSR) refers to the portion of a borrower’s gross monthly income that goes towards repaying all property loans, including the loan being applied for. MSR is capped at 30% of a borrower's gross monthly income.
It applies only to housing loans for the purchase of an HDB flat or an executive condominium bought directly from a developer.
When calculating MSR, FIs are to take into consideration:
All the borrower’s property loans.
At least 20% of the monthly debt obligation for any property loan where the borrower is a guarantor.
To calculate a borrower’s MSR, use the following formula:
(Monthly repayment instalments for all property loans / Gross monthly Income) x 100% ≤ 30%
Total debt servicing ratio (TDSR) refers to the portion of a borrower’s gross monthly income that goes towards repaying the monthly debt obligations, including the loan being applied for.
A borrower's TDSR should be less than or equal to 60%.