AS THE Singapore Interbank Offered Rate has been increasing rapidly over the past few months ("Key rates on the rise again as S$ weakens"; March 28), I was looking to refinance my floating-rate mortgage into a fixed-rate mortgage.
Little did I know that much time would be needed, and that I would have to submit many documents - such as income statements, credit card statements and other loan documents.
I am sure that there are many borrowers who are unable to refinance their loans because they could not meet the total debt servicing ratio (TDSR) guidelines.
They would be at the mercy of the banks, which usually charge much higher rates after the two- or three-year "promotional" period. This could cause substantial financial distress, and could lead to higher default risks.
While I am not against the TDSR guidelines for new loans, I urge the Monetary Authority of Singapore to consider waiving the guidelines for refinancing if the new loan amount is the same or smaller, and if the monthly repayment is the same or lower under the new financing terms.
Yeo Chee Kean
Little did I know that much time would be needed, and that I would have to submit many documents - such as income statements, credit card statements and other loan documents.
I am sure that there are many borrowers who are unable to refinance their loans because they could not meet the total debt servicing ratio (TDSR) guidelines.
They would be at the mercy of the banks, which usually charge much higher rates after the two- or three-year "promotional" period. This could cause substantial financial distress, and could lead to higher default risks.
While I am not against the TDSR guidelines for new loans, I urge the Monetary Authority of Singapore to consider waiving the guidelines for refinancing if the new loan amount is the same or smaller, and if the monthly repayment is the same or lower under the new financing terms.
Yeo Chee Kean
