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Measures to Further Stabilise the HDB Resale Market
Revision of Mortgage Loan Terms
To ensure financial prudence in purchase of public housing and discourage over-consumption, we will reduce the maximum tenure for HDB housing loans from 30 years to 25 years. The Mortgage Servicing Ratio (MSR) limit will also be reduced from 35% to 30% of the borrower’s gross monthly income. These measures are in line with those introduced by the Monetary Authority of Singapore (MAS) to encourage financial prudence among borrowers, which is especially important given that the current low interest rate environment is unlikely to be sustained.
In tandem, the MAS will reduce the maximum tenure of new housing loans and re-financing facilities granted by financial institutions for the purchase of HDB flats (including DBSS flats) from 35 years to 30 years. New loans with tenures exceeding 25 years and up to 30 years will be subject to tighter loan-to-value (LTV) limits.
Requiring Singapore Permanent Resident Households to Wait Three Years
Currently, Singapore Permanent Resident (SPR) households, i.e. SPR households with no Singapore citizen owner, may buy resale HDB flats as soon as they acquire SPR status.
We have reviewed this policy and have decided that SPR households should wait three years from the date of obtaining SPR status, before they can buy a resale HDB flat.
This measure will apply to resale applications received on or after 27 Aug 2013, 5:30pm.
