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.
The actual interest rates charged for mortgages will continue to be determined by the private financial institutions, they said.
For loans granted by HDB, the new interest rate floor will apply to fresh applications for an HDB Loan Eligibility letter received on or after midnight on Sep 30.
However, there will be no impact to existing applications received by HDB before this time. It will also not affect the actual HDB concessionary interest rate, which will remain at 2.6 per cent per annum.
Meanwhile, the Loan-to-Value limit for HDB loans will be lowered from 85 per cent to 80 per cent.
"The lower LTV limit will apply to new flat applications for sales exercises launched and complete resale applications which are received by HDB on or after Sep 30, 2022," the agencies said.
A wait-out period of 15 months will be imposed for private residential property owners to buy a non-subsidised HDB resale flat after they have sold their property.
This will also apply to those who sold their private property prior to submitting an application to buy a resale flat.
Such property owners were previously allowed to buy a non-subsidised HDB resale flat on the open market, as long as they sell their private properties within six months of the purchase.
This wait-out period will not apply to seniors aged 55 and above who are moving from their private property to a four-room or smaller resale flat, the agencies said.
The wait-out period for private home owners who are first-timers and wish to apply for the Central Provident Fund (CPF) Housing Grant and Enhanced CPF Housing Grant for their resale flat purchase also remains unchanged at 30 months.
"It is a temporary measure which will be reviewed in future depending on overall market conditions and housing demand," they added.
"The Government remains committed to keep public housing inclusive, affordable and accessible to Singaporeans. We will continue to monitor the property market and adjust our policies to ensure that they remain relevant.
"We urge households to exercise prudence before taking up any new loans, and be sure of their debt-servicing ability before making long-term financial commitments."
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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.
The actual interest rates charged for mortgages will continue to be determined by the private financial institutions, they said.
For loans granted by HDB, the new interest rate floor will apply to fresh applications for an HDB Loan Eligibility letter received on or after midnight on Sep 30.
However, there will be no impact to existing applications received by HDB before this time. It will also not affect the actual HDB concessionary interest rate, which will remain at 2.6 per cent per annum.
Meanwhile, the Loan-to-Value limit for HDB loans will be lowered from 85 per cent to 80 per cent.
"The lower LTV limit will apply to new flat applications for sales exercises launched and complete resale applications which are received by HDB on or after Sep 30, 2022," the agencies said.
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A wait-out period of 15 months will be imposed for private residential property owners to buy a non-subsidised HDB resale flat after they have sold their property.
This will also apply to those who sold their private property prior to submitting an application to buy a resale flat.
Such property owners were previously allowed to buy a non-subsidised HDB resale flat on the open market, as long as they sell their private properties within six months of the purchase.
This wait-out period will not apply to seniors aged 55 and above who are moving from their private property to a four-room or smaller resale flat, the agencies said.
The wait-out period for private home owners who are first-timers and wish to apply for the Central Provident Fund (CPF) Housing Grant and Enhanced CPF Housing Grant for their resale flat purchase also remains unchanged at 30 months.
"It is a temporary measure which will be reviewed in future depending on overall market conditions and housing demand," they added.
"The Government remains committed to keep public housing inclusive, affordable and accessible to Singaporeans. We will continue to monitor the property market and adjust our policies to ensure that they remain relevant.
"We urge households to exercise prudence before taking up any new loans, and be sure of their debt-servicing ability before making long-term financial commitments."
Continue reading...