Response to two articles on Total Debt Servicing Ratio rules - The Business Times, 6 and 11 April 2015
Mr Yeo Chee Kean and Mr Ong Choon Hwa have suggested that the refinancing of certain property loans could be exempted from the total debt servicing ratio (TDSR) rules (“Allow more flexibility in home loan refinancing”, 6 April 2015 and “Refinancing: Be fair to long-term investors”, 11 April 2015).
There is indeed an exemption for refinancing of properties bought before the introduction of the TDSR rules, i.e. the option to purchase was granted before 29 June 2013. The exemption covers refinancing of housing loans for owner-occupied residential properties. It also applies to loans relating to investment properties for a transition period until 30 June 2017, provided the borrower commits to a debt reduction plan. This is to encourage those who have taken on high leverage on their investment properties to right-size their loans as early as possible.
We thank Mr Yeo and Mr Ong for giving us the opportunity to reiterate the exemptions from TDSR.
Bey Mui Leng (Ms) Director (Corporate Communications) Monetary Authority of Singapore