1st Housing Loan 2nd Housing Loan From 3rd
LTV Limit 80%; or 60% if the loan tenure is more than 30 years or extends past age 65 50%; or 30% if the loan tenure is more than 30 years or extends past age 65 40%; or 20% if the loan tenure is more than 30 years or extends past age 65
Minimum Cash Down Payment 5% (for LTV of 80%)
10% (for LTV of 60%) 25% 25%
Non-Individual Borrowers 20%
Mortgage Servicing Ratio (MSR)
The Monetary Authority of Singapore (MAS) has capped the Mortgage Servicing Ratio (MSR) for housing loans granted by financial institutions for EC units bought directly from property developers at 30% of a borrower’s gross monthly income.
The 30% MSR cap will apply to EC purchases where the Option to Purchase is granted on or after 10 December 2013.
Total Debt Servicing Ratio (TDSR)
The Monetary Authority of Singapore (MAS) has introduced a Total Debt Servicing Ratio (TDSR) framework for all property loans granted by financial institutions (FIs) to individuals1 on 28 June 2013.
This will require FIs to take into consideration borrowers’ other outstanding debt obligations when granting property loans. They will help strengthen credit underwriting practices by FIs and encourage financial prudence among borrowers.
The TDSR of 60% means that the total debt of borrowers cannot be more than 60% of their income.
The methodology for computing the TDSR will be standardised. FIs will be required to:
take into account the monthly repayment for the property loan that the borrower is applying for plus the monthly repayments on all other outstanding property and non-property debt obligations of the borrower;
apply a specified medium-term interest rate or the prevailing market interest rate, whichever is higher, to the property loan that the borrower is applying for when calculating the TDSR;1
apply a haircut of at least 30% to all variable income (e.g. bonuses) and rental income; and
apply haircuts2 to and amortise the value of any eligible financial assets taken into consideration in assessing the borrower’s debt servicing ability, in order to convert them into ‘income streams’ in computing the TDSR.
1 3.5% for housing loans and 4.5% for non-residential property loans.
2 Eligible liquid assets which are pledged for at least 4 years with the FI from which the borrower is taking the property loan will not be subject to any haircut.