Your salary determines how much a bank will lend you, and therefore what price range of condo you can realistically afford. But the calculation is not as simple as “earn X, borrow Y.” Several rules and requirements affect your borrowing capacity.
The TDSR Rule
The Total Debt Servicing Ratio (TDSR) limits your total monthly debt obligations to 55% of your gross monthly income. This includes your new condo mortgage, any existing property loans, car loans, personal loans, and credit card debt.
For example, if your gross household income is S$15,000 per month, your total monthly debt payments cannot exceed S$8,250. If you have no other debt, your maximum condo mortgage payment is S$8,250 per month.
Salary Needed by Condo Price
Assuming a 25-year loan at the MAS stress rate of 4% interest, with no other debt obligations:
| Condo Price | Loan (75%) | Monthly Payment | Min Monthly Income | Min Annual Income |
|---|---|---|---|---|
| S$1.5M | S$1.125M | ~S$5,940 | S$10,800 | S$130,000 |
| S$2.0M | S$1.5M | ~S$7,920 | S$14,400 | S$173,000 |
| S$2.5M | S$1.875M | ~S$9,900 | S$18,000 | S$216,000 |
How Much CPF OA You Need
Beyond salary, you need sufficient CPF OA savings. For a S$2M condo: down payment (25%) is S$500,000. Cash minimum (5%) is S$100,000. CPF needed (20%) is S$400,000 plus BSD of approximately S$69,600 for a total CPF commitment of approximately S$457,600. A recommended CPF OA balance is at least S$200,000 to S$300,000.
Factoring in Existing Loans
Your borrowing capacity shrinks significantly with existing debt. An HDB mortgage of S$1,500 per month and a car loan of S$800 per month reduce your available TDSR limit. If you already own a property, tighter rules for second properties further limit borrowing.
Stress Test Rate
Banks apply a stress test rate (currently around 4-4.5%) to assess your ability to repay if interest rates rise. This means the income requirement is higher than the current interest rate alone suggests.
Practical Takeaway
A general guideline: to comfortably buy a S$2M condo as a first property, you need approximately S$12,000 to S$15,000 monthly household income, S$100,000 to S$200,000 cash savings, and S$200,000+ CPF OA balance.
For a precise calculation for your specific situation, book a strategy session to model your affordability accurately.