TDSR & MAS 632 (External)_131210-2
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Transcript of TDSR & MAS 632 (External)_131210-2
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MAS Notice 632 Residential Property Loan &
MAS Notice 645 Total Debt Servicing Ratio With effect from 10 December 2013, Tuesday
For external presentation
1 Updated on 9 December 2013
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Summary of Property Cooling Measures
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ABSD: PRs 1st property (5%) & Singaporeans 2nd property (7%). PRs 2nd property & Singaporeans 3rd property at 10%. Foreigners & companies 15%.
LTV: 50% with 1 o/s HL (30% if tenure > 30 years or loan past age 65). 40% with 2 o/s HL (20% if tenure > 30 years or loan past age 65). Corporates LTV from 40% to 20%.
Min Cash Down Payment: No o/s HL: No change, i.e. 5% and 10% if tenure > 30 years or loan extends past age 65.
1 o/s HL: 25% ( from 10%).
Mortgage Service Ratio for HDB loan for purchase & refinancing: 30% of borrowers gross monthly income.
Interest absorption scheme (IAS) removed
Government Land Sale programme reinstated
Max loan-to-value (LTV) limit from 90% to 80%
Sellers stamp duty (SSD) levied on sale of private residential
property within 1 year of purchase
SSD holding period increased to 3 yrs (full SSD if sold within 1st year, 2/3 SSD if sold within 2nd year
& 1/3 SSD if sold within 3rd year)
For buyers with o/s HL, min cash down -payment increased
from 5% to 10% of valuation
limit & LTV from 80% to 70%
Min. occupation period of non-subsidised HDB flats from 3 to 5 years (resale & subletting
restriction)
SSD holding period to 4 yrs & rates chargeable changed to
16%, 12%, 8% & 4%
LTV 60% for individual borrowers with at least 1 o/s HL
LTV 50% for companies
14 Sep 2009
20 Feb 2010
30 Aug 2010
14 Jan 2011
6 Oct 2012
Additional Buyers Stamp Duty
+ 10% for foreigners & companies
+ 3% for PRs 2nd property
+ 3% for Singaporeans 3rd property above existing Buyers Stamp Duty:
1% on the 1st $180K
2% on the next $180K
3% on the remainder
12 Jan 2013
Max 35 years for loan tenure
LTV if > 30 yrs or the sum of tenure & age > 65 yrs, i.e. LTV
60% if no HL, 40% with 1 o/s HL
Refinancing tenure 35 yrs less no of years since 1st HL disbursed
LTV for companies from 50% to 40%
8 Dec 2011
29 Jun 2013
Total Debt Servicing Ratio (TDSR) threshold of 60% for Singapore & overseas properties, for residential /
non-residential properties, to individuals or entities set
up solely to purchase pty;
Haircut of 30% on variable income, rental & assets. All borrowers to be mortgagors, guarantors to be co-
borrowers;
For joint borrowings, the income-weighted average age of borrowers to be used to determine loan tenure.
28 Aug 2013
Banks max HDB tenure from 35 to 30 years
Banks HDB LTV reduced by 20% points if > 25 to 30 years or loan past age 65
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Applications of MAS Notice 645 & MAS Notice 632
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Notice 632 Residential Property Loan
Notice 645 Total Debt Servicing Ratio
Properties in Singapore & overseas Residential, commercial, industrial
(including land, construction loan)
Individual, sole proprietor & entities set up specifically to purchase properties
Singapore residential properties Purchase (Home Loan): Individuals & all
non-individuals entities
Other credit facilities (Non-Home Loan): Individuals & vehicles set up solely to
purchase properties
TDSR up to 60% LTV, tenor, income-weighted average
age, borrower to be mortgagor,
prohibition of interest-only facility
Ap
plica
tio
n
Exc
lus
ion
Bridging Loan up to 6 months Credit facility secured by a pool of
collateral including property where the
market value of the subject property is
< 50% of the pool of collateral
Credit facility granted by a bank to a Property Developer to purchase
residential property for development
Bridging Loan Credit facility secured by a pool of
collateral (exclusion on LTV only)
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Tenure
(Years)
Tenure + Age (extend past
retirement age 65)
Loan-
To-Value
No of HL (including
this application)
Cash
Down Payment
LTV, Tenure & Min Cash Down payment for property purchase
5% 10%
80% 60%
65
25 > 25
to 30
5% 10%
80% 60%
65
30 > 30 to 35
25% 25%
50% 30%
65
30 > 30
to 35
25% 25%
40% 20%
65
30 > 30
to 35
Only 1 HDB
Loan ^ 1st Private HL
3rd Home
Loan
> 65 > 65 > 65 > 65
Private Property OTP from 12 Jan 13 HDB OTP
from 28 Aug 13 Subject
Property
Note: LTV for companies is 20%
2nd Home Loan
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^ If more than 1 HL, Banks HDB LTV reduced by 20% points if > 25 to 30 years or loan past age 65
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Borrower, Mortgagor & Guarantor relationships
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Date of OTP or
Application
B, M, G same as
original app?
Borrower to
be Mortgagor
Facility
Applied
Guarantor to
be borrower Yes
Yes
HL for
Purchase
Refinancing
HL only
Non-HL
Facility
Refinancing non-HL
(TL only or HL + TL)
Non-HL: Individuals only HL: Individuals & Companies Applicant
OTP from
29/6
Yes
Yes
OTP from
29/6
Yes
Yes
App from
29/6
Application date
from 29 June 2013
^ Where TDSR of borrowers meet 60% threshold but Bank requires guarantor for
added assurance, the true guarantor can be excluded as borrower.
Original TL/OD
Application Date
Yes No
No Yes Yes
No Yes Yes
Bf
29/6
From
29/6
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Purchase of flat from HDB/DBSS/resale or re-financing HDB
loan
Loan Details Loan from HDB Banks HDB Loan
Maximum Tenure
for Purchase
25 years
30 years
Maximum Tenure
for Re-financing Not applicable
30 years less the no of years
since the 1st home loan granted
for the purchase of the flat was
disbursed
Maximum LTV
(no outstanding
Housing Loan)
90%
80% if loan tenure up to 25 years
& loan period does not extend
past age 65
60% if loan tenure > 25 to 30
years or loan period extends past
age 65
Mortgage Service
Ratio 30% 30%
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The applicable HDB effective dates are on or after 28 Aug 13
Transaction Type Loan from HDB Banks HDB Loan
Purchase of flat from
HDB
Application for HDB Loan
Eligibility (HLE) letter received on
or after 27 August, 5.30 pm and
sales exercises launched from
July 2013
OTP granted on or after
28 Aug 2013, and sales
exercise launched from
July 2013
Purchase of resale flat
Application for HLE letter received
on or after
27 Aug 13, 5.30 pm
OTP granted on or after
28 August 2013
Re-financing of HDB
loan N/A
Application date on or after
28 August 2013
Taking over of
ownership of existing
flat
Application for HLE letter received
on or after
27 Aug 13, 5.30 pm
OTP granted on or after
28 August 2013
Purchase of flat under
the Design, Build & Sell
Scheme (DBSS)
Application for HLE letter received
on or after
27 Aug 13, 5.30 pm
OTP granted on or after
28 August 2013
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Income weighted average age (IWAA) is computed for joint
borrowings in order to determine tenure (w.e.f. 29 Jun 13)
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Income of Younger Borrower >
Income of Older Borrower
Income of Younger Borrower <
Income of Older Borrower
Outcome IWAA is lower
Loan tenure is longer
IWAA is higher
Loan tenure is shorter
Income-
Weighted
Average Age
(IWAA)
A age 30 earns $7,000 pm
B age 50 earns $3,000 pm
IWAA = (30 x $7K) + (50 x $3K)
$7K + $3K
= 36 years
A age 30 earns $3,000 pm
B age 50 earns $7,000 pm
IWAA = (30 x $3K) + (50 x $7K)
$3K + $7K
= 44 years
Loan Tenure
for Private HL
Max Tenure = 35 yrs (60% LTV) Max age of 75 years less IWAA, capped
at 35 years. As 75 36 = 39 is higher than cap, max is 35 years
Tenure for 80% LTV = 29 yrs Tenure 30 years & < age 65 on maturity, i.e. tenure is 65 - 36 = 29 years
Max Tenure = 31 Years (60% LTV) Max age of 75 years less IWAA, capped
at 35 years. As 75 44 = 31 is lower than cap, max is 31 years
Tenure for 80% LTV = 21 years Tenure 30 years & < age 65 on maturity, i.e. tenure is 65 - 44 = 21 years
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Instalment
(Single)
Existing
Instalment
(Joint)
Credit Card
(unsecured
revolving)
Secured
Revolving
Guarantor HDB or
EC fr Dev
Instalment
on subject
loan
3.5% for HL
Existing:
Statement
Apportion to
income
contribution
for existing
joint debts
(evidence of
joints income)
Min
Payment in
latest stmt
or interest
on full credit
limit
Monthly
interest on
amt
drawndown
or interest on
full credit limit
20% of
credit
facilities
(including
corporate)
Total Debt Servicing Ratio for PHL & HDB
70% average
last 12
months exc.
employer CPF
100% Fixed +
70% Variable
70% if borrower
is the landlord.
Submit stamped
tenancy
agreement with
min 6 months).
% deduction on
value divide 48
% Deduction Pledge 4yr for subject loan
Unpledged /
Pledge < 4 yr
SGD Deposit 0% 70%
Non Pty Asset 30% 70%
Fixed Variable Fixed +
Variable Rental
Assets
(unpledged)
100% monthly
income
exclude
employer CPF
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Excluded MI of existing
property if buying HDB/EC
from developer
Existing resi pty to be sold No o/s facility on any pty except HL on 1st pty to be sold
No other pty singly or jointly
60%
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HDB
Purchase
Mortgage Servicing Ratio for HDB (new/resale) & EC Purchased from Developer
Instalment
(Single)
Existing
Instalment
(Joint)
70% average
last 12
months exc.
employer CPF
100% Fixed +
70% Variable
70% if
borrower is
the landlord
Submit
stamped
tenancy
agreement with
min 6 months).
% deduction on
value divide 48
% Deduction Pledge 4yr for subject loan
Unpledged /
Pledge < 4 yr
SGD Deposit 0% 70%
Non Pty Asset 30% 70%
Fixed Variable Fixed +
Variable Rental
Assets (unpledged)
100% monthly
income
exclude
employer CPF
Apportion to income
contribution of
existing Property
Loan (evidence of
joint borrowers income)
Subject loan:
Interest at 3.5% for
residential loan
Existing Pty Loans:
Instalment in
statement
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HDB Re-financing excluded
from MSR 30% cap
a. OTP prior to 12 Jan 13
b. Only property
c. Occupied by borrower
d. No facility on any pty except HL
on property being refinanced
EC Re-financing (purchased from
developer & still within minimum
occupation period)
a. OTP prior to 10 Dec 13 and
conditions b,c & d above
30%
Excluded MI of existing
property if buying HDB/EC
from developer
Existing resi pty to be sold No o/s facility on any pty except HL on 1st pty to be
sold
No other pty singly or jointly
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Every $100K loan or $125K house price requires $750
monthly income (max 80% LTV for 30 years tenure)
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House Price Loan Amount Monthly Income
$ 125,000 $ 100,000 $ 750
$ 750,000 $ 600,000 $ 4,500
$ 1,000,000 $ 800,000 $ 6,000
$ 1,250,000 $ 1,000,000 $ 7,500
$ 1,500,000 $ 1,200,000 $ 9,000
Every
$100K loan
+$750 income
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$1000 debt requires additional $1,670 monthly income to
support the commitment. Every $100K deposits will reduce
monthly income required by $625.
House Price Loan Amount Monthly
Income
(30 Yrs)
Monthly
Income with
$1000 Debt
Monthly Income
with $1K Debt +
$100K Deposits*
$125,000 $100,000 $750 $2,420 $1,795
$750,000 $600,000 $4,500 $6,160 $5,535
$1,000,000 $800,000 $6,000 $7,660 $7,035
$1,250,000 $1,000,000 $7,500 $9,160 $8,535
$1,500,000 $1,200,000 $9,000 $10,650 $10,025
* Deposits placed with a Singapore Bank and must show evidence of funds prior to the first loan drawdown
(latest bank statement prior to solicitors advice to drawdown)
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Before After
Household Income (S$) 10,000 10,000
Max monthly repayment with 60% TDSR 6,000 6,000
1st Property Buyer, Max LTV 80%
Interest rate 2.80% 3.50%
Tenure (years) 30 30
Max loan amount on $6K monthly repayment 1,460,225 1,336,165
Max 1st property value 1,825,285 1,670,210 (-8%)
Illustration No 1: For a first time private property buyer with
average household income of $10K and no debts, the buyer
can afford property priced 8% lower than before the TDSR
rules.
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Illustration No 2: For a 2nd time property buyer with an
existing home loan, the max property price he can afford is
8% less than prior to the new rules
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Before After
Household Income (S$) 10,000 10,000
Max monthly repayment with 60% TDSR 6,000 6,000
Existing Home Loan
Loan Amount 800,000 800,000
Interest Rate 1.30% 1.30%
Tenure (years) 30 30
Monthly Repayment 2,685 2,685
2nd Property Buyer, Max LTV 50%
Interest rate 2.80% 3.50%
Tenure (years) 30 30
Max loan amount with existing HL $800K HL 806,816 738,270
Max 2nd property value 1,613,631 1,476,539 (-8%)
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person.
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