MAS
The 4% mortgage stress-test rate
Answers:What interest rate do Singapore banks use to assess a home loan?
Checked against the source 2026-08-01
The rule
Banks must compute the mortgage portion of TDSR and MSR using a medium-term interest rate floor of 4% per annum for residential property, regardless of the rate actually offered.
- Issued by
- MAS
- Applies to
- Residential property loans. Non-residential uses 4.5%.
- Source
- MAS, official guidance
Where this goes wrong
Budgeting from the quoted promotional rate. Approved loan quantum is set by the stressed rate, which is typically 20–25% lower.
Worked through
A $1,350,000 loan over 25 years, comparing a 2.5% offered rate against the 4% floor the bank must assess against.
| Monthly instalment at the offered 2.5% | $6,056 |
|---|---|
| Monthly instalment used for TDSR, at 4% | $7,126 |
| Difference the assessment is built onIncome has to cover the higher figure, not the one you will pay. | $1,069 |
Budgeting from the promotional rate overstates the loan a bank will approve by roughly the gap above — which is why an in-principle approval so often lands below what the affordability sums suggested.
Computed with the same functions as the calculators on this site. An illustration, not tax advice — confirm your own position with MAS or your conveyancing lawyer before you commit to anything.
Run this on your own numbersAlso from MAS
Go deeper
Rules change, and a figure without a date is worth nothing. Ask whether this is still current before you rely on it for a decision.