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MSR Requirement Now Applicable to EC

Written by Admin on .

The latest ruling in December 2013 is the adoption of the Mortgage Service Ratio (MSR) for purpose of calculating the housing loan amount to be granted for Executive Condominum (EC) by banks.
With this change, housing loans granted for purchase of resale HDB flats, Build-to-Order (BTO) flats as well as EC are required to meet both the MSR and TDSR calculations.  Previously, the housing loan granted for EC was based on the TDSR calculation only.

How are Home Owners coping with TDSR & MSR when applying for Housing Loans?

Written by Admin on .

It is about four months since the new measures to standardize banks’ debt service calculation when granting property loans were introduced on 29 June 2013.

To recap, the 2 debt service calculations are:-

(1) Total Debt Servicing Ratio (TDSR) < 60%

Total monthly payments on all loan payments including new property loan must not exceed 60% of total gross income

(2) Mortgage Service Ratio (MSR) < 30% (applicable to HDB flat only)

Total monthly payment on HDB loan must not exceed 30% of total gross income

Learn more about TDSR and MSR.

It is evident that during the past few months, the new debt servicing policy has affected certain groups of property buyers/owners more than others. Let’s look at the ‘after-effects’ felt by the affected groups:

MAS New Debt Servicing Framework on Property Loans

Written by Patricia Hung on .

The new policy by MAS, which took effect on 29 Jun 2013, imposes a new lending framework on banks when granting property loans, thereby standardizing the broad lending guidelines among all banks. 

The new measure applies to all property loans granted to individuals, sole-proprietorship, investment holding companies set by individuals solely to buy properties, whether for purchase or refinancing. The properties cover both residential and non-residential properties located in Singapore and overseas.

The new measure includes:

(a) Total Debt Service Ratio not more than 60%

A person's total monthly debt repayment cannot exceed 60% of the gross monthly income

                        Monthly Total Debt Obligations                              X  60%

 Gross Monthly Income (excl CPF Contribution by Employer)