Tighter Rules On Long Mortgages On Singapore Property.
Singapore introduced tighter rules on long mortgages to cool the property market.
Singapore (I-Newswire) October 15, 2012 - Singapore introduced tighter rules on long mortgages to cool the Singapore property market. The Monetary Authority of Singapore (MAS) has set a 35 year limit on home loans. Non individual borrowers (such as company) are now subject to 40 per cent loan limit, this is down from 50 per cent. This new loan to value limits apply only to new residential property loans. Financial institutions may still offer refinancing facilities for the full balance outstanding under a residential property loan subject to their credit assessment.
Monetary Authority of Singapore (MAS) explains that the current low interest rate environment and the rapid credit growth driven by the United States’ latest round of quantitative easing (QE3) may cause prices to spike beyond sustainable levels. An eventual correction will hurt borrowers and destabilized Singapore’s financial system.
In recent weeks before the introduction of new curbs on long mortgages, some local banks will offering 50 year home loans. These long tenure loans, will cause buyers to over estimate their financial limits and give buyers and lenders false confidence.
Market expert do not believe this latest measure to cool the property market will cause prices to fall drastically in reaction. But some buyers will be subjected to these new measures and may be forced to exit the market. There may be some correction in the growth of property prices and transaction volumes but this will ensure the market grow at a sustainable and stable pace.
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Published On:October 15, 2012
Print Release:Print Release
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