Total debt servicing ratio (TDSR) tweaks help two groups

[reporter2]

http://www.straitstimes.com/business...elp-two-groups

Total debt servicing ratio (TDSR) tweaks help two groups

Rennie Whang

Sep 3, 2016


The move to fine-tune the total debt servicing ratio (TDSR) is clearly not a relaxation of cooling measures but is best seen as a step to avert hardship during an economic slowdown.

The amended refinancing framework announced by the Monetary Authority of Singapore (MAS) on Thursday will protect both banks and home owners, experts note.

Two groups of owners, in particular, can benefit.

Some owner-occupiers who bought their properties after the TDSR was introduced in June 2013 may not be able to clear the 60 per cent TDSR threshold now, perhaps due to incurring additional liabilities, reduced income or even job loss.

Thursday's rule change means the TDSR threshold will no longer apply if they want to refinance loans for their own homes.

"Although this group of people make up a small percentage, they may need this new guideline more than others," said Mr David Baey, MoneySmart head of mortgage.

Most loans signed in 2013 would now be at rates of between 2.5 per cent and 3.5 per cent.

The deals on offer now could be a three-month Sibor plus 0.75 per cent or less, making rates effectively about 1.62 per cent.

A person with a loan tenure of 20 years and a $500,000 loan could save about $332 a month after refinancing, said Mr Baey.

The rule change also helps people with investment property loans. Previously, they could refinance above the 60 per cent TDSR threshold only if they committed to a debt reduction plan - this varies according to the bank - and applied by June 30 next year.

MAS has now spelt out what the debt reduction plan is and has taken away that June 30 deadline.

Overall, the new rules bode well for existing home owners who might want to take advantage of low floating rates or a fixed rate package, said CBRE Research.

But as much as some in the market may have hoped, they will not affect new demand for homes and do not signal that any changes to cooling measures are nigh.

[teddybear]

Very funny "reason" to give for saying fine-tuning the TDSR is "clearly not a relaxation of cooling measures"!

Now, TDSR has been implemented as 1 of a property cooling measures, that is clear as blue sky that we know (unless you are an idiot)!
Then, you relax something concerning TDSR, and then say that relaxing a "property cooling measures" is "clearly not a relaxation of cooling measures"????????????? LOL!

Helping 2 groups of property owners hence "clearly not a relaxation of cooling measures"?
What about those who had been hard hit by the property cooling measures such as TDSR+ABSD who had already been forced sold or sold at a cut-throat price to get cash flow?
What about those who had been hit by property cooling measures like SSD?
What about those who got stuck because want to sell but few genuine buyers because they all asking for -20% below market price because of all those property cooling measures?
Why no effort to help these group of property owners???? So the relaxation is clearly a relaxation of TDSR, which is clearly a property cooling measures?

http://www.straitstimes.com/business...elp-two-groups

Total debt servicing ratio (TDSR) tweaks help two groups

Rennie Whang

Sep 3, 2016


The move to fine-tune the total debt servicing ratio (TDSR) is clearly not a relaxation of cooling measures but is best seen as a step to avert hardship during an economic slowdown.

The amended refinancing framework announced by the Monetary Authority of Singapore (MAS) on Thursday will protect both banks and home owners, experts note.

Two groups of owners, in particular, can benefit.

Some owner-occupiers who bought their properties after the TDSR was introduced in June 2013 may not be able to clear the 60 per cent TDSR threshold now, perhaps due to incurring additional liabilities, reduced income or even job loss.

Thursday's rule change means the TDSR threshold will no longer apply if they want to refinance loans for their own homes.

"Although this group of people make up a small percentage, they may need this new guideline more than others," said Mr David Baey, MoneySmart head of mortgage.

Most loans signed in 2013 would now be at rates of between 2.5 per cent and 3.5 per cent.

The deals on offer now could be a three-month Sibor plus 0.75 per cent or less, making rates effectively about 1.62 per cent.

A person with a loan tenure of 20 years and a $500,000 loan could save about $332 a month after refinancing, said Mr Baey.

The rule change also helps people with investment property loans. Previously, they could refinance above the 60 per cent TDSR threshold only if they committed to a debt reduction plan - this varies according to the bank - and applied by June 30 next year.

MAS has now spelt out what the debt reduction plan is and has taken away that June 30 deadline.

Overall, the new rules bode well for existing home owners who might want to take advantage of low floating rates or a fixed rate package, said CBRE Research.

But as much as some in the market may have hoped, they will not affect new demand for homes and do not signal that any changes to cooling measures are nigh.

[Kelonguni]

The authorities never admitted tdsr was a cooling measure, so its removal is not a relaxation.

You know, I know. More important is what you do after you know.

[teddybear]

Since if almost everybody knows, I wonder what people feel in their heart about what they said? Will they feel that they are people with very high integrity?

The authorities never admitted tdsr was a cooling measure, so its removal is not a relaxation.

You know, I know. More important is what you do after you know.

[Kelonguni]

Since if almost everybody knows, I wonder what people feel in their heart about what they said? Will they feel that they are people with very high integrity?

Honestly, do you trust politicians to have 100% integrity?

I think 95% is incredible already. The 5% is how they present things.

Anyway is tweak not remove so on paper everything looks the same.

[Kelonguni]

I do feel for those who have let go to maximise profits, gain some cash flow, or fear.

The no refinancing exercise was still a good one with several benefits. I leave you to consider who benefits from the last 3 years and how?

Very funny "reason" to give for saying fine-tuning the TDSR is "clearly not a relaxation of cooling measures"!

Now, TDSR has been implemented as 1 of a property cooling measures, that is clear as blue sky that we know (unless you are an idiot)!
Then, you relax something concerning TDSR, and then say that relaxing a "property cooling measures" is "clearly not a relaxation of cooling measures"????????????? LOL!

Helping 2 groups of property owners hence "clearly not a relaxation of cooling measures"?
What about those who had been hard hit by the property cooling measures such as TDSR+ABSD who had already been forced sold or sold at a cut-throat price to get cash flow?
What about those who had been hit by property cooling measures like SSD?
What about those who got stuck because want to sell but few genuine buyers because they all asking for -20% below market price because of all those property cooling measures?
Why no effort to help these group of property owners???? So the relaxation is clearly a relaxation of TDSR, which is clearly a property cooling measures?

[Arcachon]

Can only say the lord answer my prayer. Amen.