In an announcement made by the Monetary Authority of Singapore (MAS) on Thursday, 1 September 2016, homeowners now have more flexibility with regard to the Total Debt Servicing Ratio (TDSR) scheme, allowing them to refinance existing home loans.
This initiative will allow homeowners to capitalize on the low interest rates that financial institutions are currently offering, forgoing the 60% TDSR limit. While the exemption was previously only allowed to owners of properties bought before the inauguration of TDSR in June 2013, it now applies to all owner-occupied housing loans.
Properties purchased for investment purposes, on the other hand, now requires the borrower to repay at least 3% of the loan’s total outstanding balance over three years. Prior to this change, borrowers could only have their investment properties refinanced above the 60% limit only if they committed to a debt reduction plan and applied to refinance before 30 June 2017.
