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MAS adjusts TDSR rules for refinancing; cooling measures to remain
THE Monetary Authority of Singapore (MAS) on Thursday refined rules behind the total debt servicing ratio (TDSR) framework that would allow overleveraged borrowers to refinance their housing loans, subject to a prescribed debt restructuring plan.
"The refinements... do not represent a relaxation of property market cooling measures," the MAS said in a press statement, noting that these would allow borrowers to better manage their debt through refinancing.
With immediate effect, loans for investment properties purchased before TDSR came into effect can be refinanced above the TDSR threshold of 60 per cent as long as the borrower commits to repay at least 3 per cent of the outstanding balance over a maximum of three years, and meets the bank's credit assessment.
Prior to this, the MAS did not prescribe an interest rate for debt reduction plans that such borrowers must commit to before refinancing at above the 60 per cent threshold.