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How to check the maximum value of a new condo that I can purchase based on my income
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To determine the maximum value of a new condo you can purchase based on your income, you can use the Total Debt Servicing Ratio (TDSR) framework.
For example, if you have a household income of $10,000 per month, under the TDSR rule, you can use up to a maximum of $5,500 a month (i.e., 55%) to service all debts, including existing mortgages, personal loans, and car loans.
Here is a detailed breakdown:
| Total income | $10,000 |
| Threshold 55% of total income | $5,500 |
| Monthly repayment for non-property loans | $2,000 |
| Monthly repayment of existing home loan | $0 |
| Balance income for property loan | $4,000 |
| Max. home loan for next property (Based on interest of 3.5% p.a. and 25-year loan tenure) | $798,984 |
| Estimated affordability (grossed-up to 100%) | $1,065,312 (75% LTV) |
| Minimum down-payment (cash & CPF) | $255,328 |
This example can help you estimate the maximum value of a new condo you can purchase based on your income.
Happy house hunting!