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Personal Banking Lecture 4&5: Housing Loan Part 2: HL Guidelines (MAS…
Personal Banking Lecture 4&5: Housing Loan Part 2: HL Guidelines
MAS Notice 632
Prohibition of Interest Only Loan
No principal amount payment for certain period
Prohibition of Interest Absorption Scheme
Interest absorption arrangement to pay interest pertaining to the loan
Purchaser's Contribution
Purchaser's Cash --> Purchaser's CPF --> Bank Loan
Borrower Declaration
Credit facility, any discount or rebate
Checks with Bureaus and HDB
Credit worthiness
Outstanding --> Residential Property
Maximum Loan Amount
Loan to Value (LTV)
V(100%-cash%)-CPF
LTV% X V (Current Market Valuation or Purchase Price, whichever that is lower)
80% Loan, 5% Cash
First Home Loan
Tenure <= 30 years
IWA + Loan Tenure <= 65 years
60% Loan, 10% Cash
First Home Loan
Tenure >= 30 years
IWA + Loan Tenure > 65 years
50% Loan, 25% Cash
Second Home Loan onwards
Tenure <= 30 years
IWA + Loan Tenure <= 65 years
CPF (Original Account)
Wage ceiling $6,000
Can be used on:
Stamp Duties
Legal Fees
Monthly Instalments
Part of Purchase Price
MAS Notice 645
MAS 128 (Refinancing)
Owner Occupied
Exempted from TDSR
Investment property
Exempted from TDSR if:
Repay >= 3% of loan outstanding with 3yrs
Fulfils financial institutions' credit assessment
TDSR 60%