What is Mortgage Servicing Ratio- MSR
In Singapore, the Mortgage Servicing Ratio (MSR) is a measure used by financial institutions to assess a borrower's ability to service their mortgage loan repayments. The MSR is part of the Total Debt Servicing Ratio (TDSR) framework implemented by the Monetary Authority of Singapore (MAS) to ensure responsible borrowing practices and maintain financial stability.
The MSR specifically focuses on the borrower's ability to service the monthly repayments for their HDB / EC property loan. It calculates the percentage of the borrower's gross monthly income that is used to service the mortgage loan, including the principal and interest payments.
Mortgage Servicing Ratio Calculation :
Total Income $10,000 x 30% MSR = $3,000
This will be the maximum monthly repayment besides the TDSR calculation whichever is lower.