Stricter borrowing criteria for property buyers, 15-month wait for private property owners buying HDB flats

by Albert02

Stricter borrowing criteria for property buyers, 15-month wait for private property owners buying HDB flats

Stricter borrowing criteria for property buyers, 15-month wait for private property owners buying HDB flats. The maximum amount of money that home purchasers can borrow to buy their homes will be limited immediately, preventing borrowers from experiencing future loan servicing problems.

The cooling measures come after interest rates have risen significantly and are expected to rise further, according to a joint statement issued just after 11.40 p.m. on Thursday by the Monetary Authority of Singapore (MAS), the Ministry of National Development (MND), and the Housing Development Board (HDB). The government will make various steps to guarantee that home buyers borrow within their means and to keep the housing market from overheating. These take effect on September 30.

The MAS will boost by 0.5 percentage point the medium-term interest rate floor used to calculate the total debt servicing ratio (TDSR) and mortgage servicing ratio (MSR) for private financial institution property loans. The TDSR is the amount of a borrower’s total monthly income that goes toward repaying all monthly debt obligations, whereas the MSR, which is applicable to loans for HDB purchases, is the fraction that goes toward repaying all property loans. This implies that the MAS is employing tighter standards to assess applicants’ ability to repay and hence qualify for a loan. This will apply to real estate loans with the option to buy or sell on or after September 30.

Private financial organizations will continue to set mortgage interest rates. Stricter criteria will also be used to determine the eligibility of HDB unit buyers for a HDB concessionary housing loan. From September 30, an interest rate floor of 3% will be implemented for determining the permissible loan amount for HDB flats. This means that the annual interest rate used to calculate the qualifying loan amount for a HDB housing loan will be 3%, or 0.1 percentage point more than the current CPF Ordinary Account (OA) interest rate.

Click the image to read the full details of report or at this link:
https://www.straitstimes.com/business/property/stricter-borrowing-criteria-for-property-buyers-15-month-wait-for-private-property-owners-moving-to-hdb-flats


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