Saturday, 11 April 2015

[Straits Times] Refinancing: Be fair to long-term investors

I ECHO Mr Yeo Chee Kean's appeal to the Monetary Authority of Singapore (MAS) for a waiver of its regulations on home-loan refinancing ("Allow more flexibility in home loan refinancing"; Monday), especially for properties bought long before the property market cooling measures were introduced in 2013.

Long-term property investors like me, who made our investments more than five years ago, did not contribute to the property bubble, and are not the intended targets of the MAS' broad property cooling


Property investments were designed to provide a stream of passive income and financial independence for our retirement.

With noticeable success in deflating the emerging property bubble, the MAS' cooling measures can now be calibrated to be more targeted at speculative property purchases rather than other buyers.

This would free genuine long-term property investors from the stranglehold of banks charging higher interest or requiring mortgagors to make partial principal repayment and reduce the tenure of their loans.

The latter two bank requirements could result in higher monthly mortgage repayments in the midst of the languishing property rental market in Singapore - where thousands of properties are unoccupied, where the annual property values have yet to be adjusted downwards, and where property taxes paid for unoccupied properties are no longer refundable.

Perhaps, one criterion to help banks determine a mortgagor's financial prudence and loan-servicing capability is the monthly repayment track record of the mortgagor since the loan was first disbursed.

Ong Choon Hwa