MAS Restricts Loan Tenure for Residential Properties

[Fourth]

Those who bought yesterday 5th oct not affected by the new ruling, why should they cancel? My friend just signed on dotted line for a $1m 3 bedder at sky miltonia on 80% loan >30yrs tenure. He in his 40s, waited almost a decade for price to drop and finally decided to buy his 1st property after inherited a HDB years back

 

As long as he don't ever need to refinance no problem. Three years from now if he wants to refinance then...

 

From here, all the affected 40+ middle age people who needs to refinance is being played out by this "smart" measure. No lump sum to refinance then pay higher interest after three years.

 

[ShepherdPie]

Not sure why, but seem that the measure heat up the mkt instead of cooling it. Was supposed to rent out my place but instead got a offer 30% more than my 4 mth ago purchase price . Maybe buyer will to beat the system my dating the option to Friday.

Edited October 6, 2012 by ShepherdPie

[Porker]

Another circus of a thread.

The key point of this shenanigan is income for the average folk (even HDB prices are sky high) doesn't match property prices.

And a big factor of the high property prices is the land price.

[Sabian]

So ironic. The one fighting the fire is also the one fanning the flames.

[Felipe]

But FT cant buy our hdb what, so no different mah..

People who drive up hdb price are our own Typical Singaporean..

 

exactly. there are more FT so typical Sporean chiong pte property to rent out, jacking up prices. thats y simple logic of mass population,tight squeeze of property leads to only one thing- price increase. HDB will not be spared cos land value increases.

[Roadie]

Same here. Only can't deny that more FT means more ppl means more expensive homes, simple logic.

I also agree. FTs make good tenants. Every year pay higher rent and never complain.

 

See so many people complaining about FTs. But they only see half the story...those who benefit from higher prices are Singaporeans. Go to any property launch and see how many Singaporeans buying their 2nd and 3rd property.

 

I myself am not complaining as the rental return more than covers my loan repayments. Nicely set up for an early retirement.

[Felipe]

I also agree. FTs make good tenants. Every year pay higher rent and never complain.

 

See so many people complaining about FTs. But they only see half the story...those who benefit from higher prices are Singaporeans. Go to any property launch and see how many Singaporeans buying their 2nd and 3rd property.

 

I myself am not complaining as the rental return more than covers my loan repayments. Nicely set up for an early retirement.

 

it's a chicken and egg thing. good to have FT if we want higher property prices. but since we're on the subject of cooling, more FTs hardly helps the cooling process.

[Kyrios]

All these came about because of the incompetence and overestimation of Mah BT's abilities a few years back..

 

Now all these polices only 治镖不治本...

[Wind30]

Part of me doesn't like the new measures coming in, because it smacks heavily of excessive intervention curbing free market movements, and the scope of the measures is essentially what shld be covered by banks' own risk management. Why does the govt need to do this for the banks?

 

you must be kidding me....

 

after what happened to the banks in US you are telling me this??

[Wind30]

I also agree. FTs make good tenants. Every year pay higher rent and never complain.

 

See so many people complaining about FTs. But they only see half the story...those who benefit from higher prices are Singaporeans. Go to any property launch and see how many Singaporeans buying their 2nd and 3rd property.

 

I myself am not complaining as the rental return more than covers my loan repayments. Nicely set up for an early retirement.

 

that is what the problem government is trying to fix by reducing the loan tenure.

 

Basically if a super low interest rate, you can have very long tenure and basically cut your monthly loan repayments to be very low so that rental (even though it is low compared to todays prices) can cover. That is what most singaporeans are doing.

 

But this ultimately is not sustainable in long term as once your interest rates goes up, all you super long tenure loans becomes expensive and a lot of people will die.

 

I think since MAS cannot set interest rates (which I think they should try a little), this is probably the next best thing.

[Gendut]

Never heard of PR not buying hdb.

 

Its like a cat dowan to eat fish. They took the PR precisely for the benefits of hdb ownership. Those who did not buy are accumulating their money for the purchase.

[Mcscot]

Dear MCFer's,

 

I am going to ask one question. For the people who have bought on >30years loan ie those stretching themselves to 40-50 years especially those who are older ie >30-35 yo. I think their situation is bad!

 

Consider this ... in 2-3 years time when their mortgage "promotion" (ie first 2 years low interest and the subsequent years much higher) then they are screwed cos they cannot refinance their loans to their previous 40-50 year limit and now the Govt has set a limit that if you borrow till retirement age and want a longer loan period than the banks can only provide 60% mortgage!

 

So 3 situations will happen when they are are thinking about refinancing:

1) Refinance to same period as before ie 40-50years: they have to pay another 20% top up of their loan to get the bank's 60% mortgage

2) Reduce their loan TENURE: So they have to pay higher mortgage premiums every month

3) Don't refinance and maintain their current status quo and pay higher interest from year 3 or 4 and be at the mercy of their banks which may be dependent on SIBOR

 

What do you all think? I think that majority will maintain at 3 and be at the mercy of the banks as I think that the least of all the 3 options!

[Yewheng]

I would like to ask a question.

 

From what I read it only affects those who take loan more than 30years or loan exceed age 65yrs old right?

 

So those taking less than 30 years and never exceed age of 65 years old are unaffected right?

[Yeshe]

So ironic. The one fighting the fire is also the one fanning the flames.

 

who also added fuel in the process [laugh]

[Yeshe]

that is what the problem government is trying to fix by reducing the loan tenure.

 

Basically if a super low interest rate, you can have very long tenure and basically cut your monthly loan repayments to be very low so that rental (even though it is low compared to todays prices) can cover. That is what most singaporeans are doing.

 

But this ultimately is not sustainable in long term as once your interest rates goes up, all you super long tenure loans becomes expensive and a lot of people will die.

 

I think since MAS cannot set interest rates (which I think they should try a little), this is probably the next best thing.

 

yes, this is wat most people forget, they thought the current interest rate will last FOREVER!!!

[Ben5266]

I would like to ask a question.

 

From what I read it only affects those who take loan more than 30years or loan exceed age 65yrs old right?

 

So those taking less than 30 years and never exceed age of 65 years old are unaffected right?

Right.

[Yewheng]

Right.

 

Than still ok what. It's a good move.

[Theoldjaffa]

If joint borrower, 5 year loan lor, unless 40% d/p(first loan).

Cannot afford d/p or installment?

No purchase.

 

Weeding out the marginal buyers who cannot afford to lose the money one.

Less demand= lower prices.

Good or not?

Very hard to tell, cos prices go up people kpkb, price controlled, people also kpkb.

 

We have a very paternalistic govt who seek the protect the people who cannot really afford a pricey private property, but want to beat swollen face act fatty.

Many such people within our midst.

 

They only want buyer with real holding power.

No money dun upgrade, live within your means.

If you need >35 year loan, then you cannot afford it, period.

Thats what the govt is saying. Not too hard to understand.

Fully agree. But some here just want to grumble. Everything the govt does is to protect the rich. These people need to get past their myopia and start thinking with a level head.