MR YEO Chee Kean and Mr Ong Choon Hwa have suggested that the refinancing of certain property loans could be exempted from the total debt servicing ratio (TDSR) rules ("Allow more flexibility in home loan refinancing"; April 6, and "Refinancing: Be fair to long-term investors"; April 11).
There is indeed an exemption for the refinancing of properties bought before the introduction of the TDSR rules - that is, when the option to purchase was granted before June 29, 2013.
The exemption covers the refinancing of housing loans for owner-occupied residential properties. It also applies to loans relating to investment properties for a transition period until June 30, 2017, provided the borrower commits to a debt-reduction plan.
This is to encourage those who have taken on high leverage on their investment properties to right-size their loans as early as possible.
We thank Mr Yeo and Mr Ong for giving us the opportunity to reiterate the exemptions from TDSR.
Bey Mui Leng (Ms)
Director (Corporate Communications)
Monetary Authority of Singapore
There is indeed an exemption for the refinancing of properties bought before the introduction of the TDSR rules - that is, when the option to purchase was granted before June 29, 2013.
The exemption covers the refinancing of housing loans for owner-occupied residential properties. It also applies to loans relating to investment properties for a transition period until June 30, 2017, provided the borrower commits to a debt-reduction plan.
This is to encourage those who have taken on high leverage on their investment properties to right-size their loans as early as possible.
We thank Mr Yeo and Mr Ong for giving us the opportunity to reiterate the exemptions from TDSR.
Bey Mui Leng (Ms)
Director (Corporate Communications)
Monetary Authority of Singapore
