MAS Makes It Easier to Refinance Properties Bought Before the Introduction of TDSR

On Feb 10, 2014, the Monetary Authority of Singapore (MAS) announced some exemptions that would please owners having difficulties refinancing older properties due to the TDSR measures. In their press release entitled, "MAS Broadens Exemption from TDSR Threshold for Refinancing of Owner-Occupied Residential Properties Purchased before the Implementation of TDSR Rules", it was announced that some exemptions will be allowed for owner occupied and investment properties.

Owner Occupied

In the first exemption. owners of properties with the Option to Purchase or OTP granted before June 29, 2013 (the date of the introduction of the TDSR measures) will be exempted from the 60% requirement when seeking to refinance their properties. This is provided they do not own any other property or have any other outstanding property loans.

The second exemption applies for owners of HDB or Executive Condominium units. They are exempted from MSR the property is owner occupied and are purchased before the respective MSR implementation dates.

The third exemption applies to loan tenures, where owners are allowed to keep the previous loan tenure when refinancing their properties.

Investment Properties

For investment properties, refinancing must be done before Jun 30, 2017. The owner can refinance above the 60% threshold but there are restrictions: a) OTP must be before June 29, 2013, b) the owner must commit to a debt reduction plan with the FI at the point of financing and 3) fulfil the FI credit assessment. These measures are to help investor rethink their financial commitments and readjust their debt and perhaps avoid having to sell off their properties.

Some borrowers with good reasons to refinance will now face less difficulties in doing so. The older home loans were not assessed with the new TDSR rules and hence the exemption for properties bought before the introduction of the stipulated TDSR rules is therefore fair.”

Koh Ching Ching, group head of corporate communications at Oversea-Chinese Banking Corp (OCBC)

The Singapore government is making a right move in making sure that the measure do not significantly impact the genuine home owners as well as giving the investment properties owners some slack to tighten up their debt ratios.

Definitely levels the playing field and avoids an ugly situation of pressure selling by owners who cannot qualify for refinancing of loans under the new TDSR and MSR guidelines.

PROPERTY LAUNCHES & INVESTMENTS

Property Launches & Investments

Exemption from TDSR, MSR

MAS Makes It Easier to Refinance Properties Bought Before the Introduction of TDSR

Owner Occupied

Investment Properties

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