A deleveraging nudge from fine-tuning of TDSR rules on refinancing
THE Monetary Authority of Singapore's recent fine-tuning of refinancing rules relating to the total debt servicing ratio (TDSR) governing property loans is a strong nudge towards deleveraging.
Stretched borrowers who hold investment properties will have to think about actively managing down their debt, especially as rental income is under pressure and economic growth is easing. Far from stimulating demand for new housing loans, the move also acts as a wake-up call for those inching precariously close to the debt-income ceiling set by the regulator.
To allow borrowers more flexibility in managing their debt obligations, MAS this month fine-tuned the three-year-old TDSR such that all home owners and holders of investment properties will be able to seek refinancing at better terms even when their TDSR limit crosses 60 per cent.
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