Many HDB owners are worried that refinancing will be an issue if they could not meet the 30% Mortgage Servicing Ratio (MSR) threshold. The good news is we can help you exempt from the HDB MSR guideline.
What is Mortgage Servicing Ratio (MSR)?
It is a lending ratio specifically for financing of HDB flats and Executive Condominiums. Your monthly repayments on either of these properties cannot be more than 30% of your monthly gross income. For instance, if you earn $5000 without bonus each month, a maximum of $1500 can be used towards the property loan repayment.
We have observed that MSR have done well as a cooling measure, to curb the rise of HDB flats.
One should not be confused with TDSR, which is another lending ratio that must be met. In other words, you must pass MSR and TDSR if you seek a mortgage for HDB flats and ECs. For private property owners, only TDSR is applicable.
Exempt from HDB MSR
You must meet these criteria to be exempted from this ratio, when you refinance the HDB flat or non-privatized EC.
- Option to purchase in respect of the HDB Flat was granted prior to 12 January 2013;
- The HDB Flat is the only Property that he owns, either by himself or jointly;
- Borrower is occupying the HDB Flat;
- No other outstanding property loan other than this HDB Flat.
- If you tick the boxes for these criteria, you may consider refinancing sooner than later. This window of opportunity is here for you to grab. Go ahead, compare HDB refinancing rates now.
Read more on HDB MSR here.
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