IRAS
Total Debt Servicing Ratio (TDSR)
• Financial institutions must ensure that borrowers' monthly repayment for all debts does not exceed 60 per cent of their monthly income. This includes the mortgage, credit card bills, car loans, personal loans, and so on.
General loan-to-value (LTV) limits
• The LTV ratio refers to the ratio of the home loan to the value of the property.
• What's the change: There is no change to the 60 per cent threshold, but it will no longer apply to mortgage equity withdrawal loans with loan-to-value ratios of 50 per cent and below.
• These refer to loans which allow borrowers to use residential properties as collateral to get cash. This change will benefit asset-rich but cash-poor retirees.
• Loan to value (LTV) is the housing loan quantum a bank or financial institution is willing offer as a percentage of the property's valuation. LTV limits were tightened in 2013.
• LTV is now up to 80 per cent of the property's value but subject to TDSR. It also depends on whether this is your first, second or subsequent mortgage and your loan tenure.
• For example, a buyer looking for a second housing loan, and one that extends beyond 30 years or his retirement age (set at 65), can only borrow up to 30 per cent of the value of the property, subject to TDSR.
MAS NEWS
BANK LOAN
1st Property 80% Loan
2nd Property onwards 60% Loan
2012 Oct 6th :
first loan 80% , 2nd loan onwards 60%
MAS Restricts Loan Tenure for Residential Properties
