Let’s face it, not all of us can pay for our property in full briefcases of cash like those HongKong shows we’ve seen when we were younger. This also means loans from the bank/HDB, and this is where Mortgage Servicing Ratio (MSR) comes sliding into your DMs.
MSR regulates the loan that you can take to purchase a HDB/Executive Condo(EC). The MSR for a loan is capped at 30% of your gross monthly income; this means that you cannot have a loan that requires a monthly repayment higher than 30% for your place.
Let’s take a look at the basics of how to calculate your MSR:
Say Xiao Ming and Xiao Hua has a combined fixed income of: $8,000
MSR: $8,000 x 30% = $2,400
This means that Xiao Ming and Xiao Hua cannot have a monthly loan repayment of more than $2,400 for their HDB/EC. So what’s the maximum amount of mortgage loan Xiao Ming and Xiao Hua can get from banks and HDB?
Let’s assume a few things about our friendly couple:
Xiao Ming & Xiao Hua are below/ at 40 years old
Their loan tenure is at 25 years
Interest rates are at 3.5% for Banks and 2.6% for HDB
HDB Maximum Mortgage Loan: $529K
Bank Maximum Mortgage Loan: $479K
Want to find out how they got this loan? Welp, property agents like us have certain tools to get this amount. Want to find out how much your maximum mortgage loan is going to be at? Feel free to contact me! :)
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