The new MAS regulations to promote financal prudence

[Cuaba]

My housing loan monthly installment is paid fully by CPF. Does this form part of the 60%?

No.....

[pegasi]

The MAS announcement states that the new framework "will require financial institutions (FIs) to take into consideration borrowers’ other outstanding debt obligations when granting property loans." It does not elaborate what "other outstanding debt obligations" exactly are, but I assume they have to be loans obtained from the regulated FIs, not debts that one owes ah long for example.

The new framework refers to the Total Debt Servicing Ratio (TDSR) framework for all property loans granted by FIs to individuals. The methodology for computing the TDSR will be standardised and there will be guidelines for the FIs on how to apply it, so I don't think there is an issue with the FIs under-declaring a borrowers’ debts.

[dasboot]

Dunno if they will ease up a bit on such restrictions come 2016? GE

[Cuaba]

Dunno if they will ease up a bit on such restrictions come 2016? GE

Should tighten , not ease up....

[bliss88]

if the loan from my father mother, does that count :P

anyway, really dislike how the govt can change policy overnight. think dat's the reason why coe prices still so high and so many people rushing to buy cuz of fear that policies may become worse. sigh .... when govt policies can cause businesses to go bust and cause panic, smthg must be wrong. guess what is the root cause. Lol...

[wolfeyes1974]

more measures...good stuff..

[wolfeyes1974]

My housing loan monthly installment is paid fully by CPF. Does this form part of the 60%?

I suspect it's part of 60% as long as you're still servicing the mortgage loan even if your monthly instalment can be fully paid by CPF. It's to promote financial prudence so it should take into consideration the situation like "if you lose your job?" then you'll not have any CPF contribution to pay the instalment. Outstanding loan is still a liability until they're fully paid up.

[GTiR]

More measures pls.

[Mezz72]

am I affected by all these rules on mas unsecured lending if my income is more then $120k?

[wolfeyes1974]

am I affected by all these rules on mas unsecured lending if my income is more then $120k?

yes..

[Mezz72]

it sounds like out of scope u earn more then $120k or have personal assets of more then S$2m....

[wolfeyes1974]

it sounds like out of scope u earn more then $120k or have personal assets of more then S$2m....

Earning more may also mean you're spending more (bigger cars, expensive property and etc)...your monthly expenses may higher so it's applicable

[Mezz72]

yes this I understand n agree. but I'm really just asking about the rule. 😉

[Mezz72]

Anyways the reason I asked is because I'm not sure if I interpret the law jargon correctly in the MAS notice 635 with reference to the Banking Act, Cap 19 dated 29/11/2013, paragraph 17, page 13 which seemed to imply exemption for the group of people I mentioned.

Earning more may also mean you're spending more (bigger cars, expensive property and etc)...your monthly expenses may higher so it's applicable

[Watcha]

Tightening total debt ratio is good and should remain. It promotes prudence. The days of 10 years car loan and 50 years housing loan should not return.

Seller's stamp duty is good. It reduces punters.

However additional buyer's stamp duty is not so. It deters long term investment.