MAS Imposes Financing Restrictions on Motor Vehicle Loans
Singapore, 25 February 2013 … The Monetary Authority of Singapore (MAS) will re-introduce1 financing restrictions on motor vehicle loans granted by financial institutions.
2 The maximum motor vehicle loan amount will depend on the open market value (OMV) of the motor vehicle purchased:
(i) For a motor vehicle with OMV that does not exceed $20,000, the maximum loan-to-value (LTV) is 60% of the purchase price, including relevant taxes and the price of the Certificate of Entitlement, where applicable; and
(ii) For a motor vehicle with OMV of more than $20,000, the maximum LTV is 50%.
In addition, the tenure of a motor vehicle loan will be capped at 5 years.2
3 The financing restrictions are necessary to encourage financial prudence among buyers of motor vehicles. In this prolonged environment of very low interest rates, there is greater risk of buyers over-extending themselves on motor vehicles.
4 The financing restrictions will not apply to loans for the purchase of commercial vehicles3. They will also not apply to loans for the purchase of motorcycles.
5 The rules will take effect from 26 February 2013.4