+

EVERYTHING YOU NEED TO KNOW ABOUT MAS TOTAL DEBT SERVICING FRAMEWORK

+By Sean Lim

Founder of FindaHomeLoan.co

Trusted by clients, Quoted in media

+About Us

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+Total Debt Servicing Ratio (TDSR) Framework

The Monetary Authority of Singapore introduced a TDSR framework for property loans.

It prescribes a methodology for financial institutions (FIs) in computing the TDSR.

+Total Debt Obligations

• All debts will be checked and declared during the property loan application.

• No more guess-work or rounding down of liabilities.

+Medium-Term Interest Rate

• FIs will now use 3.5% as the interest rate to assess your borrowing capability for residential properties.

• It will not be based on

the teaser rates.

+Haircut on Variable Income

• Variable income such as bonus, commission will now be recognized at 70% of its value. This is a 30% haircut.

+Haircut on Financial Assets

• Financial assets such as cash, stocks, deposits will now be recognized between 0-70% of its value.

• It depends on the pledged status and asset types.

+TDSR Threshold

• After including Total Debt Obligations, applying a medium-term interest rate of 3.5% and haircut on variable income or assets, your total outstanding debt cannot exceed 60% of monthly gross income

+Income-Weighted Average Age

• Average age of all borrowers will be income-weighted.

• Age will tilt towards the one earning more income.

+Borrowers

• All borrowers must be mortgagors.

• If a borrower has no property prior, this change means you will be subjected to the LTV limits and effect of ABSD in subsequent purchases.

+Guarantors

• Guarantors will now be treated as borrowers.

• If a guarantor has no property prior, this change means you will be subjected to the LTV limits and effect of ABSD in subsequent purchases.

+Seeking Advise

• FindaHomeLoan.co is a leading home loan comparison portal in Singapore.

• Click here to compare and contact us.

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