What is the minimum salary for a 1.8m loan?

To determine the minimum salary required for a loan of SGD 1.8 million, you need to consider several factors, including the Total Debt Servicing Ratio (TDSR) and the Mortgage Servicing Ratio (MSR), as well as the loan tenure and interest rate.

Total Debt Servicing Ratio (TDSR)

The TDSR, set by the Monetary Authority of Singapore (MAS), caps the total debt payments of an individual at 55% of their monthly gross income. This includes all debt obligations such as mortgages, car loans, credit card debt, and other personal loans.

Mortgage Servicing Ratio (MSR)

For HDB loans, the MSR is 30% of the borrower's gross monthly income. However, since you're considering a loan of SGD 1.8 million, it is likely for a private property, and the MSR does not apply here.

Loan Tenure and Interest Rate

The loan tenure and interest rate will significantly impact the monthly repayment amount. A longer loan tenure will reduce the monthly repayment but increase the total interest paid over the life of the loan.

Calculation Example

Assuming a 25-year loan tenure and an interest rate of around 2-3%, here is a rough estimate:

- Monthly repayment for a SGD 1.8 million loan over 25 years at 2.5% interest could be approximately SGD 7,500 to SGD 8,000.

Minimum Salary Requirement

Using the TDSR of 55%, if the monthly mortgage repayment is SGD 7,500, you would need:

- Total monthly debt payments to be 55% of your gross income.
- Therefore, if SGD 7,500 is 55% of your gross income, your gross income would need to be around SGD 13,636 per month.

Annual Salary

To convert this to an annual salary:

- SGD 13,636 per month * 12 months = SGD 163,632 per year.

So, the minimum annual salary required to service a SGD 1.8 million loan, considering the TDSR and other assumptions, would be approximately SGD 163,632.

You can use the mortgage calculator and other financial tools available on EdgeProp Singapore to get a more precise calculation based on your specific circumstances.