SINGAPORE: The Government will tighten maximum loan quantum limits and introduce the 15-month wait-out period for private home owners buying Housing Plank resale flats, as part of new residence cooling measures to market sustainable property marketplace conditions.
The Loan-to-Value limit for HDB financial loans will also be lowered from 85 per cent to 80 per cent.
This was announced inside a joint press release by HDB, the Financial Authority of Singapore (MAS) and the Ministry of National Growth (MND) on Thurs (Sep 29) somewhat after 11. 40pm.
The organizations noted that market interest rates have “risen significantly” and are prone to increase further in the future, affecting borrowing expenses for home purchases.
“To ensure advisable borrowing and avoid future difficulties in maintenance home loans, the Government will certainly tighten the maximum loan quantum limits with regard to housing loans, ” they said.
Under this, higher rates of interest will be assumed whenever assessing borrowers’ repayment ability.
This is done via two measures: Raising the particular medium-term interest rate floor used to compute the total debt servicing ratio and the mortgage maintenance ratio by 0. 5 per cent, and also introducing an interest rate flooring of 3 per cent for computing the eligible loan amount for those granted simply by HDB.
The particular increased medium-term rate of interest floor will apply at loans used to purchase properties where the option to purchase is granted on or after Sep 30. If there is no option to buy, it will apply when the date of purchase and purchase agreement can be on or following that date.