How much can you afford to upgrade to? Take the lowest of three limits: the loan your income supports under TDSR at a 4% test rate, the price your cash and CPF can fund once the 25% downpayment and stamp duty are paid, and the price your cash alone can fund for the 5% that must be cash. Then take something off for a buffer.
Banks quote only the first number, which is usually the highest. Here is how to find all three for an upgrade, using rules in force in November 2026, and why the comfortable figure is often lower again.
Limit 1: What Your Income Lets You Borrow
Under MAS’s TDSR rule, all your monthly debt repayments, including the new home loan, may not exceed 55% of gross monthly income. Banks test the new loan at the higher of 4% or the package’s own thereafter rate, under MAS’s 2022 measures. Bonuses and commission count at no more than 70%. For an HDB flat, the 30% MSR also applies.
Upgraders have one extra point. If your HDB loan will still be running when you take the new loan, its instalment counts too, and MAS’s LTV limit falls from 75% to 45%. Our TDSR, MSR and LTV explainer sets out the rules; this article is about using them to choose a price.
Limit 2: What Your Cash and CPF Can Fund
A 75% loan leaves 25% of the price to you, plus Buyer’s Stamp Duty, legal fees and renovation. Count only what you will actually have after the sale: cash savings plus cash proceeds, and your Ordinary Account plus the CPF refund. Our HDB sale proceeds calculator splits the two.
CPF Board caps CPF use at the lower of price or valuation unless you have set aside your Basic Retirement Sum, so a price above valuation is cash.
Limit 3: The Cash-Only Part
At least 5% of the price must be cash for a first housing loan at 75%; renovation is usually cash too. A household with plenty of CPF but little cash can hit this limit first.
The short version: Work out three ceilings (income, total funds, cash) and take the lowest. Then test the instalment at a higher rate and keep a cash buffer outside the purchase. The bank’s maximum is a ceiling, not a target.
How Much Can We Afford to Upgrade To? A Worked Example
An illustrative Citizen couple, both 40, earn S$12,000 a month in fixed salary and pay $600 a month on a car loan. After selling their flat they will have $200,000 in cash and $250,000 in CPF. They plan $50,000 of renovation and $3,000 in legal fees. Our own figures; illustration only.
Income ceiling. 55% of $12,000 is $6,600; less the car loan, $6,000 a month. At 4% over 25 years that supports a loan of about $1,137,000, which at 75% LTV matches a price of about $1.52 million.
Funds ceiling.
| Price | 25% downpayment | BSD | Legal and renovation | Total needed |
|---|---|---|---|---|
| $1,300,000 | $325,000 | $36,600 | $53,000 | $414,600 |
| $1,400,000 | $350,000 | $40,600 | $53,000 | $443,600 |
| $1,500,000 | $375,000 | $44,600 | $53,000 | $472,600 |
With $450,000 in total, the ceiling is about $1.4 million. The cash ceiling is not binding: at $1.4 million they need about $193,600 in cash, inside their $200,000.
With a buffer. If they keep $30,000 aside for emergencies (our assumption, not a rule), $420,000 is left and the price that fits falls to about $1.3 million.
The instalment test. On a $975,000 loan over 25 years:
| Rate | Monthly instalment | Share of income |
|---|---|---|
| 3% (assumed) | $4,624 | 39% |
| 4% (MAS test rate) | $5,146 | 43% |
| 5% (illustration) | $5,700 | 48% |
Add the car loan and the 5% line is about 53% of income. Their Ordinary Accounts would receive about $2,520 a month at 2026 allocation rates for their age, so roughly $2,100 to $3,200 of each instalment would come from cash.
So the bank may say $1.5 million, their savings say $1.4 million, and a buffer and a rate test point to $1.3 million or less.
Questions That Change the Number
- Will either of you stop work or cut hours? One income gone halves TDSR room but not the instalment.
- How close are you to 55? A tenure running past 65 drops the LTV to 55%; see our guide to upgrading and CPF retirement.
- Is your flat price certain? A lower sale price cuts the funds ceiling dollar for dollar.
- What else is coming? School fees, a car replacement or support for parents all compete with the instalment.
What To Do Next
- Run your figures through the home affordability calculator, then the full sale-and-purchase sum in the HDB upgrade calculator.
- Check stamp duty at each price in the stamp duty calculator.
- Try the instalment at 4% and 5% in the mortgage repayment calculator.
- Read the full money picture of an HDB to condo upgrade before you start viewing.
