Dec 25, 2021

Cory Diary : Another Round of Property Curb - TDSR

One of the tougher restriction is as follow.

"The government will also tighten the total debt servicing ratio threshold to 55% from 60%, which takes effect from Dec 16. This means that a person’s total monthly loan payments, including mortgages, cannot exceed 55% of the individual’s total gross income."

Many experts say is just 5% only. So let see how much it will be like.

TDSR Formula
To calculate a borrower’s TDSR, use the following formula:
(Borrower's total monthly debt obligations / Borrower's gross monthly income) x 100%

Residential property or secured by residential property
Not less than 3.5% or the prevailing market interest rate, whichever is higher.

Let say debt is $5000 monthly for a Condo today, Gross Salary needs to be $8333. With the 5% increase in TDSR, Salary now needs to be $9091. That's $758 increase of Gross income. Personally I feel this is not a small sum. A 9% increase in gross income needed. Basically put many people out of reach for a few years.

Merry Christmas and Happy New Year


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Articles in this Blog is personal take and sharing purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.

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