SINGAPORE – The Monetary Authority of Singapore (MAS) said on Thursday (Sept 1) it was fine-tuning the Total Debt Servicing Ratio (TDSR) rules to make it easier for borrowers with existing home loans to refinance their mortgages and pay off their debts at lower interest rates.
The Mortgage Servicing Ratio limit will also not be applied to refinancing of housing loans for Housing and Development Board flats and Executive Condominiums that are owner-occupied. Recent executive condo launches include Treasure Crest and Northwave EC while existing ones include The Terrace EC, Brownstone EC, The Visionaire EC, Parc Life EC , Waterwoods EC, Signature at Yishun, Skypark Residences, Wandervale EC, The Vales EC, The Criterion EC, The Amore EC, Bellewaters EC, Bellewoods EC.
Here is what you need to know:
1. WHAT IS THE TDSR?
The framework or rules, introduced on June 29, 2013, were implemented to encourage home buyers to borrow within their means.
The TDSR limits the home loan quantum by ensuring your monthly repayments for all your debts – mortgage, credit cards, car loans, personal loans, and so on – do not exceed 60 per cent of your monthly income.
Thus if you and your spouse earn a combined S$10,000 a month and the total of all your credit card, car loan and personal loan repayments is S$4,500 monthly, your TDSR threshold is S$6,000 (60% of S$10,000). This means the maximum monthly repayment for your home loan cannot exceed S$1,500 (S$6,000-S$4,500).