Jargon sucks. but this is the way the world works and this is why you’re on my site. I am here to break down these for you and which of these you would be using to assess your loan eligibility.
Total Debt Servicing Ratio (TDSR)
TDSR is used to consider eligibility on loans for privatized ECs and Private Properties
Your TDSR would be 60% of your assessable income; this means that the income that is allowed to service debts is at 60%. Debts include credit card bills, personal loans, renovation loans, car loans, etc… Having debt would be very strongly detrimental to your credit profile as this would limit the price of the property you would be looking to purchase
Mortgage Servicing Ratio(MSR)
MSR is used to consider eligibility on loans for new ECs and HDB Properties
Your MSR would be 30% of your assessable income and the MSR does not take in consideration for your other debts and may potentially be higher than your TDSR if you have a significant amount of debt. This however should not be abused and should be managed properly. A general Rule of thumb for managing your finance is to ensure that your debts are lower than 60% of your assessable income.
