Housing Loan Information
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Thursday, 8 June 2023
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Piccadilly Grand Housing Loan Information
Before purchasing an Executive Condominium unit, do take some time to review the loan information below:
Mortgage Servicing Ratio (MSR)
What is the Mortgage Servicing Ratio?
- The Mortgage Servicing Ratio is a measure implemented by the Monetary Authority of Singapore, and it refers to the portion of a borrower’s gross monthly income that goes towards repaying all property loans, including the loan being applied for.
- MSR is capped at 30% of a borrower’s gross monthly income
- It applies only to housing loans for the purchase of an HDB flat or an executive condominium bought directly from a developer.
Calculating MSR
- When you take a loan from a Financial Institution, these will be taken into consideration:
- All the borrower’s property loans.
- At least 20% of the monthly debt obligation for any property loan where the borrower is a guarantor.
- A borrower’s MSR is calculated using the following formula:
- (Monthly repayment instalments for all property loans / Gross monthly Income) x 100% ≤ 30%
Total Debt Servicing Ratio (TDSR)
What is the Total Debt Servicing Ratio?
- The Total Debt Servicing Ratio is a maximum threshold set by MAS. However, FIs may grant property loans to borrowers whose TDSR exceeds the threshold on an exceptional basis, subject to enhanced credit evaluation.
- The TDSR threshold for property loans is set at a maximum of 60% of the borrower’s monthly income.
- It applies to housing loans for the purchase of private properties and executive condominiums
Calculating TDSR
- Under the TSDR guidelines, your monthly monthly debt obligations and gross monthly income will be taken into account
- A borrower’s TDSR is calculated using the following formula:
- (Borrower’s total monthly debt obligations / Borrower’s gross monthly income) x 100%
Monthly Debt Obligations
Monthly debt includes all outstanding debt obligations:
- Property-related loans, including the loan being applied for.
- Car loans.
- Student loans.
- Renovation loans.
- Credit card loans.
- Any other secured or unsecured loans, including revolving loans.
For more details, please refer to the MAS website here: Total Debt Servicing Ratio for Property Loans
How Does MSR And TDSR Apply for ECs?
- For the purchase of an Executive Condominium, Financial Institutions will calculate both the MSR and TDSR for the borrower
- The lower loan amount between MSR and TDSR will be used as the basis for disbursing the loan
- Although the percentage for TDSR is higher at 60% as compared with MSR at 30%, for borrowers with existing debt obligations, the amount that can be allocated to a property loan under TDSR can actually be lower than MSR.
- For assistance on working out your loan eligibility, please feel free to contact us
How Much Home Loan Am I Eligible For?
- The advantage of purchasing an Executive Condominium is that you can still obtain up to a 75% LTV (Loan to Value) Ratio for your bank loan, even if you are currently still servicing your HDB home loan
- Please note that the amount of loan that you are eligible for is still subject to MSR and TDSR guidelines
Loan to Value
| First Loan | Second Loan | Third Loan | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Loan Tenure | Up to 30 years | 31-35 years | Up to 30 years | 31-35 years | Up to 30 years | 31-35 years | |||
| Age | Income Weighted Average Age | ||||||||
| Up to 65 | Up to 70-75 | Up to 70-75 | Up to 65 | Up to 70-75 | Up to 70-75 | Up to 65 | Up to 70-75 | Up to 70-75 | |
| Maximum LTV Limit | 75% | 55% | 55% | 45% | 25% | 25% | 35% | 15% | 15% |
| If the borrower is a shell company or not an individual, the LTV limit is 15% | |||||||||
| Minimum Cash Downpayment | 5% | 10% | 10% | 25% | 25% | 25% | 25% | 25% | 25% |
| Guarantors / Co-borrowers | All co-borrowers must be mortgagors. Guarantors must be co-borrowers if the latter did not pass the TDSR criteria. |
||||||||
| Mortgage Servicing Ratio (MSR) (for ECs) | 30% | ||||||||
| Total Debt Servicing Ratio (TDSR) | 55% | ||||||||
| Stress Test Interest Rate | 3.5% | ||||||||
The loan-to-value (LTV) limit determines the maximum amount an individual can borrow from a financial institution (FI) for a housing loan.
LTV refers to the loan amount as a percentage of the property’s value. For example, if an individual borrows $750,000 to purchase a property valued at $1,000,000, the LTV is 75%.
It was announced on 5 July 2018 that LTV limits will be tightened as part of a package of measures to cool the property market and keep price increases in line with economic fundamentals.
LTV Limits for Shell Companies
If the borrower is a shell company or not an individual, the LTV limit is 15%.
For more information, please refer to the MAS website at Loan Tenure and Loan-To-Value Limits.