Explainers
Published Date: 05 July 2018

Refinancing Rules for Housing Loans

A loan tenure cap applies to refinanced housing loans. There is no regulatory limit on loan-to-value on refinanced housing loans, as long as the borrower is deemed creditworthy.

Loan Tenure Cap

The maximum duration for a refinanced housing loan is:

  • HDB flats: 30 years – X
  • Non-HDB properties: 35 years – X

Where X = number of years that have run since the first housing loan was first disbursed for the residential property being refinanced.

Loan-To-Value Limit

There is no regulatory LTV limit on refinanced housing loans. FIs can grant up to the full amount outstanding, as long as the borrower meets the FI's credit assessment criteria.

Borrower-Mortgagor and Guarantor-Borrower Requirements

This rule applies, unless the Option to Purchase for the property was granted before 29 June 2013.

Whether MSR or TDSR is needed

Depending on the type of property, FIs may be required to compute or apply mortgage servicing ratio (MSR) or total debt servicing ratio (TDSR) to the refinanced loan.

Type of property Is MSR/TDSR required?
Owner-occupied No, but the borrower must still fulfil the FI’s credit assessment criteria.
Investment property Yes, unless the borrower meets both these criteria:
  • Commits to a debt reduction plan with a repayment of at least 3% of the outstanding balance over a period of up to 3 years.
  • Fulfils FI’s credit assessment criteria.