Notice 825 Residential Property Loans
Rules for finance companies when granting residential property loans to individuals and non-individuals.
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.
The maximum duration for a refinanced housing loan is:
Where X = number of years that have run since the first housing loan was first disbursed for the residential property being refinanced.
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.
This rule applies, unless the Option to Purchase for the property was granted before 29 June 2013.
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:
|