MAS broadens TDSR exemptions to cover refinancing of loans for owner-occupied propert

**princess_morbucks** · 10-02-14, 15:59

The Business Times ‏@BTBreakingnews 3m #MAS broadens exemption from Total Debt Servicing Ratio threshold for refinancing owner-occupied residential properties #SingaporeProperty

**princess_morbucks** · 10-02-14, 16:02

http://www.todayonline.com/business/...ied-properties

SINGAPORE — The Monetary Authority of Singapore (MAS) has widened the existing exemptions from the Total Debt Servicing Ratio (TDSR) to cover the refinancing of loans for owner-occupied properties that were bought before the measure was introduced last year.
In a statement, the MAS said it had received feedback from borrowers who have faced challenges refinancing such loans.

Under the revised rules, a borrower who bought a residential property before the TDSR rules were introduced will be exempted from the TDSR threshold as long as the buyer occupies the home that is being refinanced.
The Mortgage Servicing Ratio (MSR) will also not apply to the refinancing of loans for HDB flats and Executive Condominiums that are owner-occupied and were purchased before the respective MSR implementation dates of Jan 12 2013 and Dec 10 2013.
A similar concession will apply to loan tenures. In such cases, borrowers whose loan tenures for their owner-occupied residential properties exceed the current limits will be allowed to maintain the current tenure when refinancing the loan.

**princess_morbucks** · 10-02-14, 16:03

Hooray for those trying to refinance their loan on owner occupied properties that were bought before TDSR was implemented!!

**Ringo33** · 10-02-14, 16:06

This should be considered as good news for the property market.

**Ringo33** · 10-02-14, 16:08

when they say EC are exempted does that include fully privatized EC? ie, EC that is more than 10 years old?

**reporter2** · 10-02-14, 16:21

http://www.todayonline.com/business/...ied-properties

Business

MAS broadens TDSR exemptions to cover refinancing of loans for owner-occupied properties

Move comes after MAS receives feedback from borrowers who have had difficulties refinancing such loans

Published: 10 February, 4:54 PM

SINGAPORE — The Monetary Authority of Singapore (MAS) has widened the existing exemptions from the Total Debt Servicing Ratio (TDSR) to cover the refinancing of loans for owner-occupied properties that were bought before the measure was introduced last year.

In a statement, the MAS said it had received feedback from borrowers who have faced challenges refinancing such loans.

Under the revised rules, a borrower who bought a residential property before the TDSR rules were introduced will be exempted from the TDSR threshold as long as the buyer occupies the home that is being refinanced.

The Mortgage Servicing Ratio (MSR) will also not apply to the refinancing of loans for HDB flats and Executive Condominiums that are owner-occupied and were purchased before the respective MSR implementation dates of Jan 12 2013 and Dec 10 2013.

A similar concession will apply to loan tenures. In such cases, borrowers whose loan tenures for their owner-occupied residential properties exceed the current limits will be allowed to maintain the current tenure when refinancing the loan.

**phantom_opera** · 10-02-14, 16:31

this is a very small step .. no enough to stop the price crash of CDL and CAPL

**Cupcakes** · 10-02-14, 16:32

i smell loophole

**princess_morbucks** · 10-02-14, 16:35

More here :

http://business.asiaone.com/property...ied-properties

SINGAPORE - The Monetary Authority of Singapore (MAS) will exempt home owners from the Total Debt Servicing Ratio (TDSR) if they are refinancing their loan for the property they live in, even if they own other properties and are servicing other home loans, it said on Monday.

Get the full story from The Straits Times.
Here is the press release from MAS:
The Monetary Authority of Singapore (MAS) has received feedback from borrowers who face challenges refinancing loans for owner-occupied properties which were bought before the introduction of the Total Debt Servicing Ratio (TDSR) rules. MAS has decided to broaden the existing exemption from the TDSR threshold of 60 per cent for such loans to ease the debt servicing burden of these borrowers.
Refinancing of owner-occupied property loans
Under the revised rules, a borrower who bought a residential property before the TDSR rules were introduced - i.e. the Option to Purchase (OTP) of the residential property was granted before 29 June 2013 - will be exempted from the TDSR threshold as long as he occupies the residential property that is being refinanced.1 This is a concession compared to the current rules, which also require that he does not own any other property, or have any other outstanding property loan.
The Mortgage Servicing Ratio (MSR) will also not apply to the refinancing of loans for HDB flats and Executive Condominiums (ECs) that are owner-occupied and were purchased before their respective MSR implementation dates.2
A similar concession will apply with regard to loan tenures, for residential properties purchased before the respective implementation dates for the loan tenure limits.3 In such cases, borrowers whose loan tenures for their owner-occupied residential properties exceed the current regulatory limits4 will be allowed to maintain the remaining tenures of their loans at the point of refinancing.
Refinancing of investment property loans
The TDSR threshold of 60 per cent will continue to apply to the refinancing of all investment property loans. This is to encourage borrowers to right-size their loans and thereby reduce their vulnerability to adverse economic conditions or changes in interest rates. However, MAS recognises that some borrowers may face challenges in right-sizing their debt obligations in the short term; the starting level of debt may be too high and there may be significant costs involved if they had to sell their properties to reduce their leverage.
Therefore, MAS will allow a transition period until 30 June 2017, during which a borrower may refinance his investment property loans above the 60 per cent threshold, provided he meets the following conditions:
(a) the OTP of the property was granted before 29 June 2013;
(b) the borrower commits to a debt reduction plan with the financial institution (FI) at the point of refinancing; and
(c) the borrower fulfils the FI's credit assessment.
The changes are intended to help borrowers ease their immediate debt servicing burdens, while encouraging those who have taken on high leverage on their investment properties to right-size their loans as early as possible.
Borrowers should be aware that the current low interest rate environment will not persist indefinitely. When interest rates rise, borrowers will face higher mortgage repayments. Borrowers engaging in refinancing should therefore exercise prudence and review their debt commitments.
The revised rules will take immediate effect.

**leesg123** · 10-02-14, 16:46

HURRAY!!

for good brother Tharman!

**Arcachon** · 10-02-14, 16:47

CM -0.1 MAS broadens TDSR for loans refinanced for owner-occupied properties

**princess_morbucks** · 10-02-14, 16:57

In summary :
owner occupied homes bought before the implementation of TDSR and MSR (applicable to HDB and EC; msr not applicable to pte) will be exempted from the TDSR and MSR if refinancing is done before 30 June 2017.

**princess_morbucks** · 10-02-14, 16:58

Now...what is owner occupied home?
If husband stay in one home that is uner his name and wife stay in another home under her name, are both owner occupied ?

**hyenergix** · 10-02-14, 17:08

This is good news to many home owners who are looking to pay down their loans

**princess_morbucks** · 10-02-14, 17:10

So for the next 3 years (till 30 Jun 2017) they can refinance it.
So quickly go refinance it now, then before 30 Jun 2017, go refinance again if interest rates are low?

**Ringo33** · 10-02-14, 17:12

Is Tharman throwing a life line because he is expecting interest rate to rise?

**princess_morbucks** · 10-02-14, 18:06

Originally Posted by Ringo33

Is Tharman throwing a life line because he is expecting interest rate to rise?

This is what I concluded too.
Scary!

**bargain hunter** · 10-02-14, 18:21

me feels it is not so fun for bargain hunter liao.

**princess_morbucks** · 10-02-14, 18:58

A clearer explanation :

http://www.channelnewsasia.com/news/...medium=twitter

SINGAPORE: The Monetary Authority of Singapore (MAS) will relax its home financing rules for homebuyers who had committed to residential property purchases before the rules were announced last year.
This applies to buyers of private property who had signed an option to purchase the property before June 29, 2013.
If they are the occupiers of the property, they will be exempt from the Total Debt Servicing Ratio (TDSR) rules.
For those who bought the property for investment, they will have until June 30, 2017, to reduce their debt - such that their monthly debt repayments do not exceed 60 percent of their income.
HDB and Executive Condominium (EC) owners, who bought before the mortgage servicing rules for these categories were introduced, will enjoy similar exemptions.

MAS latest move was welcomed by the banking industry.

Ms Koh Ching Ching, group head of corporate communications at Oversea-Chinese Banking Corp (OCBC), said: "Some borrowers with good reasons to refinance will now face less difficulties in doing so. The older home loans were not assessed with the new TDSR rules and hence the exemption for properties bought before the introduction of the stipulated TDSR rules is therefore fair."

- CNA/de

**RCT** · 10-02-14, 19:13

The key is the owner must stay there.. This cannot save those over-leveraged people who bought multi-property. But it is good as it at least give those who bought the house for own stay a chance to refinance rather than be on the chopping board...

**bargain hunter** · 10-02-14, 19:48

Refinancing of investment property loans

5 The TDSR threshold of 60 per cent will continue to apply to the refinancing of all investment property loans. This is to encourage borrowers to right-size their loans and thereby reduce their vulnerability to adverse economic conditions or changes in interest rates. However, MAS recognises that some borrowers may face challenges in right-sizing their debt obligations in the short term; the starting level of debt may be too high and there may be significant costs involved if they had to sell their properties to reduce their leverage.

6 Therefore, MAS will allow a transition period until 30 June 2017, during which a borrower may refinance his investment property loans above the 60 per cent threshold, provided he meets the following conditions:

(a) the OTP of the property was granted before 29 June 2013;

(b) the borrower commits to a debt reduction plan with the financial institution (FI) at the point of refinancing; and

(c) the borrower fulfils the FI’s credit assessment.

7 The changes are intended to help borrowers ease their immediate debt servicing burdens, while encouraging those who have taken on high leverage on their investment properties to right-size their loans as early as possible.

8 Borrowers should be aware that the current low interest rate environment will not persist indefinitely. When interest rates rise, borrowers will face higher mortgage repayments. Borrowers engaging in refinancing should therefore exercise prudence and review their debt commitments.

9 The revised rules will take immediate effect.

sort of saves multiple property owner leh.

Originally Posted by RCT

The key is the owner must stay there.. This cannot save those over-leveraged people who bought multi-property. But it is good as it at least give those who bought the house for own stay a chance to refinance rather than be on the chopping board...

**minority** · 10-02-14, 19:55

Its applied to own stay units which are bought before the TDSR being implemented.

Its to help people who have already committed before TDSR and are not investors. own stay. which is very reasonable. a blanket application of TDSR is too draconian much like how Malaysia apply their policies.

So still targeting investment but own stay owners are given a life line if they had over stretched when the planed their finance before the TDSR was introduced.

**Ringo33** · 10-02-14, 20:00

When they say EC, does it mean that EC from primary or also include secondary market?

**princess_morbucks** · 10-02-14, 20:22

Originally Posted by Ringo33

When they say EC, does it mean that EC from primary or also include secondary market?

I think they are referring to the new EC.
The loan for the new EC is subjected to MSR.
Those which are 5 years or older are not subjected to the MSR.

http://www.propertyguru.com.sg/quest...e-ec-buyers-wh

**edwinleeap** · 10-02-14, 20:51

Originally Posted by minority

Its applied to own stay units which are bought before the TDSR being implemented.

Its to help people who have already committed before TDSR and are not investors. own stay. which is very reasonable. a blanket application of TDSR is too draconian much like how Malaysia apply their policies.

So still targeting investment but own stay owners are given a life line if they had over stretched when the planed their finance before the TDSR was introduced.

Investors also handed some breathing space till 30 Jun 2017 where they can refinance according to original terms provided they satisfy certain conditions.

**Allthepies** · 10-02-14, 21:00

So property gg to cheong again?! : )

**timmy** · 10-02-14, 21:25

Originally Posted by Allthepies

So property gg to cheong again?! : )

Less fire sales, but doesn't seem to be impetus for growth.

**Ringo33** · 10-02-14, 21:28

Originally Posted by Allthepies

So property gg to cheong again?! : )

cheong unlikely but it will give the market some positive boost of confidence.

However just wonder if someone own say 3 properties, A B and C.

Current living in A. Can he do a refinancing on property A, then move to property B after 6 months, do refinancing for property B, and 6 months later, move to property C do a refinancing?

**JNSYN** · 10-02-14, 21:38

Suppose someone has a fully paid own-stay property, can he re-mortgage without affected by TDSR?

If can, then he can take loan for existing property and use the money to buy a new investment property fully paid.

**Ringo33** · 10-02-14, 21:44

Originally Posted by JNSYN

Suppose someone has a fully paid own-stay property, can he re-mortgage without affected by TDSR?

If can, then he can take loan for existing property and use the money to buy a new investment property fully paid.

dont ask, just do it. early bird catch the worms

Menu

Thread: MAS broadens TDSR exemptions to cover refinancing of loans for owner-occupied propert

Thread Tools

Search Thread

MAS broadens TDSR exemptions to cover refinancing of loans for owner-occupied propert

Does this apply to re-mortgage of a fully paid property

Similar Threads

MAS adjusts TDSR rules for refinancing; cooling measures to remain

TDSR Rules on Refinancing Fine-tuned!

More facing problems refinancing homes due to TDSR

Lower taxes for 95% of owner-occupied homes next year

40% tax rebate for owner-occupied residential properties

Posting Permissions