Tighter borrowing limits in line with weakening risk appetite among banks: mortgage brokers

THE government’s move to limit how much property buyers can borrow is largely in line with the weakening risk appetite among banks, mortgage brokers said.

Among the latest measures to cool the property market, the medium-term interest rate floor, used to compute the total debt servicing ratio (TDSR) and mortgage servicing ratio (MSR), will be raised by half a percentage point for loans for the purchase of properties on or after Sep 30.

This is expected to ensure prudent borrowing as interest rates rise, said the Housing and Development Board, Ministry of National Development, and the Monetary Authority of Singapore (MAS) in a joint statement late on Thursday (Sep 29).