SINGAPORE: The Government will tighten maximum loan quantum limits and introduce a 15-month wait-out period for private home owners buying Housing Board resale flats, as part of new property cooling measures to promote sustainable property market conditions.
The Loan-to-Value limit for HDB loans will also be lowered from 85 per cent to 80 per cent.
This was announced in a joint press release by HDB, the Monetary Authority of Singapore (MAS) and the Ministry of National Development (MND) on Thursday (Sep 29) slightly after 11.40pm.
The agencies noted that market interest rates have “risen significantly” and are likely to increase further in the future, affecting borrowing costs for home purchases.
“To ensure prudent borrowing and avoid future difficulties in servicing home loans, the Government will tighten the maximum loan quantum limits for housing loans,” they said.
Under this, higher interest rates will be assumed when assessing borrowers’ repayment ability.
This will be done via two measures: Raising the medium-term interest rate floor used to compute the total debt servicing ratio and the mortgage servicing ratio by 0.5 per cent, as well as introducing an interest rate floor of 3 per cent for computing the eligible loan amount for those granted by HDB.
The increased medium-term interest rate floor will apply to loans used to buy properties where the option to purchase is granted on or after Sep 30. If there is no option to purchase, it will apply when the date of sale and purchase agreement is on or after that date.
