What Limits How Much You Can Buy
Three things cap the price. The first is your income. Under the Total Debt Servicing Ratio (TDSR), all your monthly debt payments, including the new home loan, cannot exceed 55% of your gross monthly income. For an HDB flat or an executive condominium bought from a developer, the Mortgage Servicing Ratio (MSR) also applies: property loan instalments cannot exceed 30% of income.
Lenders do not test these at the rate you will actually pay. Banks use 4% a year, or your loan's own rate if that is higher. HDB uses 3% for its loans. That is why a lower advertised rate does not raise the amount you can borrow.
The second is the loan-to-value limit. An HDB loan covers up to 75% of the price, and the rest can come from CPF, cash or both. A first bank loan also covers up to 75%, with at least 5% of the price paid in cash. The bank limit falls to 55%, with 10% in cash, if the tenure is longer than 30 years (25 years for an HDB flat) or the loan runs past age 65. For two borrowers, banks use the average age weighted by income.
The third is your savings: the cash and CPF you have must cover whatever the loan does not. The result above tells you which of the three is holding you back.