05/10/2022
MND has just released a new round of cooling measures. Here’s a summary:
1) MAS will raise by 0.5%-point the medium-term interest rate floor used to compute TDSR and MSR.
2) For HDB HLE computation, HDB will increase the interest rate floor from 2.6% to 3%.
3) The Loan-to-Value (LTV) limit for HDB housing loans will be decreased from 85% to 80%.
4) Temporary measure - Private sellers looking to downgrade to Resale HDB need to serve a wait-out period of 15 months (Except for seniors > 55).
Measures are only applied on OTPs issued on 30 September 2022 onwards.
Previous cooling measures were targeted more towards private properties, while this time round, the HDB market will likely be the most hard-hit.
HDB loan amounts will be reduced and demand from private property downgraders will be reduced, which would affect higher-quantum HDBs.
Overall private property loan amounts will also be slightly reduced. For example, a 30 year old borrower with 7k income will now be able to loan $806k instead of $857k due to the increase.
Do not hesitate to reach out if you would like to find out how this might affect your property plans and we will be happy to advise and plan for you & your family!
