Total Debt Servicing Ratio (TDSR) - Pledged Deposit

What is TDSR ?

Total Debt Servicing Ratio ( TDSR ) is a debt servicing measure that Bank/Financial Institution used to determine if the potential borrower is overly geared with debts.

How to compute TDSR?

Based on the newest measure, TDSR should not be more than 60%

Monthly Total Debt Obligations  
_________________________       <      60%

       Gross Monthly Income

Monthly Total Debt Obligation consist of:
1)  Existing Housing Loan Installment
2)  Car loan Installment
3)  Personal Loan Installment
4)  Overdraft Loan Repayment
5)  Credit card etc

How to determine monthly income based if I were to pledge my cash with the bank for 48months?

Deposit Amount X 70%
___________________       =  Monthly Income

        48 months


Example:
Mr Tan ,aged 34 , has $500k in a Local bank but he is not working

Gross monthly income will be compute as:

$500,000 X 70%
______________     =  $7291.66/mth

     48 months


Based on TDSR, Mr Tan's commitment should not be more than:
$7291.66 X 60% = $4,374.99

Car Loan: $850/mth

Mr Tan will only be left with $3,524.99

Stress Test
Newly Purchase Monthly Installment will be computed based on a standard rate of 3.5% (Introduce by MAS) for residential property to access customer debt repayment ability


Although Mr Tan might be paying only $2,700 +per month , across the banking industry, Bank will use $3,520.51 to calculate on Mr Tan's debt repayment ability.

 

Assuming that Mr Tan do not have any other commitment, the maximum loan that he is able to obtain based on 80% loan will be $784,000*, 30 years loan tenor.

*Do take note that  there are some bank which take into consideration of credit card minimum payment as a commitment. The above example is compute purely based on his car loan.


If you have any question unsolved, you can either get me via my Mobile at 9 1 7 6 7 9 7 0 or email me at den@housingmatters.com.sg or even drop a comment below :

Den Ng
Housing Matters
http://www.housingmatters.com.sg

Total Debt Servicing Ratio (TDSR) - Unpledged Deposit

What is TDSR ?

Total Debt Servicing Ratio ( TDSR ) is a debt servicing measure that Bank/Financial Institution used to determine if the potential borrower is overly geared with debts.

How to compute TDSR?

Based on the newest measure, TDSR should not be more than 60%

Monthly Total Debt Obligations  
_________________________       <      60%

       Gross Monthly Income

Monthly Total Debt Obligation consist of:
1)  Existing Housing Loan Installment
2)  Car loan Installment
3)  Personal Loan Installment
4)  Overdraft Loan Repayment
5)  Credit card etc

How to determine monthly income based on my unpledged cash on hand?

Deposit Amount X 30%
___________________       =  Monthly Income

        48 months


Example:

Mr Tan ,aged 34 , has $500k in a Local bank but he is not working

Gross monthly income will be compute as:
$500,000 X 30%
______________     =  $3,125/mth

     48 months


Based on TDSR, Mr Tan's commitment should not be more than:
$3,125 X 60% = $1,875
Stress Test
Newly Purchase Monthly Installment will be computed based on a standard rate of 3.5% (Introduce by MAS) for residential property to access customer debt repayment ability
Although Mr Tan might be paying only $1,410 +per month , across the banking industry, Bank will use $1,863.54 to calculate on Mr Tan's debt repayment ability.

Assuming that Mr Tan do not have any other commitment, the maximum loan that he is able to obtain based on 80% loan will be $415,000*, 30 years loan tenor.
*Do take note that  there are some bank which take into consideration of credit card minimum payment as a commitment. The above example is compute based on him having no other commitment.


If you have any question unsolved, you can either get me via my Mobile at 9 1 7 6 7 9 7 0 or email me at den@housingmatters.com.sg or even drop a comment below :

Den Ng
Housing Matters
http://www.housingmatters.com.sg

Total Debt Servicing Ratio (TDSR) - Gross Income

What is TDSR ?

Total Debt Servicing Ratio ( TDSR ) is a debt servicing measure that Bank/Financial Institution used to determine if the potential borrower is overly geared with debts.

How to compute TDSR?

Based on the newest measure, TDSR should not be more than 60%

Monthly Total Debt Obligations  
_________________________       <      60%

       Gross Monthly Income


Monthly Total Debt Obligation consist of:
1)  Existing Housing Loan Installment
2)  Car loan Installment
3)  Personal Loan Installment
4)  Overdraft Loan Repayment
5)  Credit card etc


Gross Monthly Income consist of:
1) Consistent Fixed salary
2) Bonus /commission (30% haircut)
3) Rental Income (30% haircut)
Tenancy period must be still left with at least 6 month from application date


Example:

Mr Tan , age 39  with a declared income 2013

Employment: $100k
Commission: $60k
Rental : $40k (more than 6 month validity)

Gross yearly income will be compute as:
$100k + ($60k X 70%) + ($40k X 70%)
= $100k + $42k + $28k
= $170k

Gross monthly income will be compute as:
$170k / 12 = $14,166

Based on the TDSR, Mr Tan commitment should not exceed

$14,166 X 60% = $8,499.60

Car Loan $2,500/mth
Personal Loan $890/mth

Mr Tan will only be left with $5,109.60

Stress Test

Newly Purchase Monthly Installment will be computed based on a standard rate of 3.5% (Introduce by MAS) for residential property to access customer debt repayment ability

Although Mr Tan might be paying only $4,000+per month , across the banking industry, Bank will use $5,106.36 to calculate on Mr Tan's debt repayment ability.

Assuming that Mr Tan do not have any other commitment, the maximum loan that he is able to obtain based on 80% loan will be $1.02mil*, 25 years loan tenor.

*Do take note that  there are some bank which take into consideration of credit card minimum payment as a commitment. The above example is compute purely based on his car and personal loan.

If you have any question unsolved, you can either get me via my Mobile at 9 1 7 6 7 9 7 0 or email me at den@housingmatters.com.sg or even drop a comment below :

Den Ng
Housing Matters
http://www.housingmatters.com.sg