MAS tweaks TDSR

By The Edge Property / Monetary Authority of Singapore | September 1, 2016 6:24 PM SGT
The Monetary Authority of Singapore (MAS) announced today (Sep 1) that it will now extend concessions on refinancing to all owner-occupied residential properties, including those bought after the introduction of the total debt servicing ratio (TDSR) loan framework on June 28, 2013. Previously, only borrowers of owner-occupied residential properties bought before the introduction of the loan framework could be exempted from the TDSR threshold of 60% when refinancing their existing home loans. However, TDSR threshold still applies for new property loans.
Likewise, MAS will allow borrowers of investment properties to refinance their property loans above the TDSR threshold, even if the properties were purchased after the TDSR framework was introduced. However, there are two conditions to be met:
  • Borrowers have to commit to a debt reduction plan with their respective financial institution to repay at least 3% of the outstanding balance within three years; and
  • Fulfill the financial institution’s credit assessment
    The revised rules will take immediate effect.