Singapore Property Cooling Measures Explained
Why Cooling Measures Exist
Singapore's property cooling measures are government policies designed to maintain a stable and sustainable property market. Introduced progressively since 2009, these measures aim to prevent speculative activity, ensure housing affordability, and manage systemic risk in the banking system. Understanding these measures is essential for any property purchase in Singapore.
Total Debt Servicing Ratio (TDSR)
TDSR limits your total monthly debt obligations (including the new property loan) to 55% of your gross monthly income. This includes all existing loans — car loans, personal loans, credit card debt, and other property loans. For variable-rate loans, banks use a stress-test interest rate (currently 4% for residential properties) to calculate the TDSR. This ensures borrowers can handle rate increases.
Loan-to-Value (LTV) Limits
The maximum LTV for your first housing loan is 75% (meaning 25% downpayment required). For a second concurrent housing loan, the LTV drops to 45% with 25% minimum cash downpayment. For a third and subsequent loan, LTV is 35% with 25% cash downpayment. These limits apply per borrower, not per property.
Impact on Your Purchase
For a Singapore Citizen buying their first private property without existing property loans, the cooling measures are relatively straightforward: 0% ABSD, 75% LTV, and 55% TDSR. The calculations become more complex for second-time buyers, PRs, and foreigners. Always consult a mortgage specialist to understand your exact financial position before committing to a purchase.