refinancing singapore property drops

The government’s introduction of the Total Debt to Servicing ratio on Singapore property has caused the mortgage financing business in banks to be hit card, according to analysts. When interviewed with the local banks on how the TDSR has affected their business, many banks refused to comment on the situation. However, based on property analyst, there is a sharp drop in the number of loans that were granted by banks for purchase of Singapore property.

Refinancing Singapore Property

Property analyst attributed that the sharp drop in mortgage business to be due to the Total Debt to servicing ratio that was introduced by the government to tone down property purchases on Singapore property. The government is afraid that should there be increase in the interest rate of mortgage loans, buyers who are overstretched in their finances might not be able finance their mortgage payments.

Refinancing Singapore Property decreases

A report also note that although owners are still keen on refinancing their Singapore property, refinancing business dropped on the last few months. Refinancing is a process whereby the owners move their current loan package to a lower interest or financing cost one. However, even if a owner is currently financing a home before the new TDSR rules, refinancing their home now will make them fall under the new ruling. That is, banks were need to access their income to see if they can repay their monthly mortgages based on the new ruling. This also caused a massive drop in the refinancing business of the bank.

Singapore Property

Also, mortgage advisors also cautioned that there are a group of buyers who have bought Singapore property earlier with a floating rate. They might not be able to refinance due to the new ruling and they might be stuck with higher mortgage payments should the interest rate increase.

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