How is the monthly instalment worked out?

The calculator uses the standard equal-instalment formula: M = P × r ÷ (1 − (1 + r)^−n), where P is the loan, r is the yearly rate divided by 12 and n is the number of months. The rate is your assumption; the tool has no default, so use a bank’s written offer or try several. Our illustration: a S$1,200,000 loan over 30 years at an invented 3.5% costs S$5,388.54 a month, and the 360 instalments include S$739,874.40 of interest, assuming one unchanged rate and the whole loan drawn on day one. For a home still being built, ask the bank how the loan is drawn; the payment schedule guide explains the stages.

What does the TDSR check measure?

CPF’s home-buying guide defines the Total Debt Servicing Ratio as the share of gross monthly income that goes to monthly debt repayments, including the new loan, and says it should be less than or equal to 55%; another CPF page combines incomes when applying with a partner. CPF’s example: on S$8,000 a month, up to S$4,400 can go to all debt repayments, so with a S$1,500 car loan the home instalment is capped at S$2,900. In our illustration, with S$16,000 of income and a S$1,000 car loan: (S$5,388.54 + S$1,000) ÷ S$16,000 = 39.93%, within 55%. CPF also suggests, to be prudent, an instalment within 25% of income; here it is 33.68%.

When does the Mortgage Servicing Ratio apply?

CPF caps the MSR, the home loan instalment alone, at 30% of gross monthly income (S$2,400 on S$8,000, its second example) and applies it only to loans for an HDB flat or an executive condominium whose minimum occupation period has not expired. A new EC bought from the developer has not completed that period, so in our reading the MSR applies; confirm with your bank. For an EC, our illustration would be above the S$4,800 MSR cap.

Why does the calculator also test 4%?

CPF’s Home Purchase Planner says, beside its bank loan rate field, “The minimum rate set by MAS is 4%.” CPF does not explain how banks apply it in the TDSR test, and MAS’s own pages could not be opened, so when your rate is below 4% the tool repeats the checks at 4% as an indication only: S$5,728.98 a month and a TDSR of 42.06% in our illustration. Ask your bank which rate it tests.

What about loan-to-value and tenure limits?

CPF says the loan-to-value limit depends on how many home loans you already have and the tenure, and describes a bank loan as up to 75% of the bank valuation or the purchase price, whichever is lower. The tool flags a loan above 75% of the price (75% of S$1,600,000 is our S$1,200,000) but does not work out your own limit, which can be lower, or the maximum tenure: no official page we could open states either.

What does this calculator not do?

  • It does not check tenure caps, lower loan-to-value limits for a second loan or a longer tenure, or age limits.
  • It does not decide how a bank counts bonuses, variable or rental income, or which debts it includes.
  • It leaves out HDB loans, CPF use, stamp duty and fees; see the mortgage pre-approval guide and mortgage broker or bank direct.
  • It is arithmetic, not advice or a loan offer.

Common questions

What is the TDSR limit in Singapore?

CPF Board says a borrower’s TDSR, all monthly debt repayments including the new home loan as a share of gross monthly income, should be at most 55%.

Does the MSR apply to a private condominium?

On CPF’s wording, no: only to loans for an HDB flat or an executive condominium whose minimum occupation period has not expired. CPF states the 55% TDSR limit without that restriction, so the tool checks it for every loan.

What interest rate should I enter?

Your own assumption, such as a bank’s written offer. The tool has no default rate; below 4% it also shows the checks at 4%, the minimum rate CPF’s planner says MAS sets.

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