Refinancing of Residential Properties Loan made easier

Owner-Occupied Res­id­en­tial Properties

Mon­et­ary Author­ity of Singa­pore (MAS) has announced to exempt owner-occupied own­ers from the Total Debt Ser­vi­cing Ratio (TDSR) of 60% when they refin­ance the prop­erty loan from bank, as long as they bought the prop­erty before 29 June 2013.

Also, the Mort­gage Ser­vi­cing Ratio  (30% of borrower’s gross monthly salary) will also not apply to HDB flats and Exec­ut­ive Con­domin­i­ums (ECs) when own­ers refin­ance the loan, as long as these homes were pur­chased before 12 Janu­ary 2013 and 10 Decem­ber 2013 respectively.

A sim­ilar con­ces­sion will apply with regard to loan ten­ures, for res­id­en­tial prop­er­ties pur­chased before the respect­ive imple­ment­a­tion dates for the new loan ten­ure lim­its of 30 years for HDB flat and 35 years for oth­ers. For HDB, the imple­ment­a­tion date was 28 August 2013 and for other owner-occupied res­id­en­tial prop­er­ties, the date was 6 Octo­ber 2012. In such cases, bor­row­ers will be allowed to main­tain the remain­ing ten­ures of their loans at the point of refinancing.

Invest­ment Res­id­en­tial Properties

The TDSR threshold of 60 per cent will con­tinue to apply to the refin­an­cing of all invest­ment prop­erty loans. How­ever, MAS will allow a trans­ition period until 30 June 2017, dur­ing which a bor­rower may refin­ance his invest­ment prop­erty loans above the 60 per cent threshold, provided he meets the fol­low­ing conditions:

(a) the prop­erty was bought before 29 June 2013;

(b) the bor­rower com­mits to a debt reduc­tion plan with the fin­an­cial insti­tu­tion (FI) at the point of refin­an­cing; and

© the bor­rower ful­fills the FI’s credit assessment.