Among all the 10 rounds of cooling measures applied by Singapore government since 2009, this is the most powerful & effective “loan curb” measure. And how does it affect loan applicants?
TDSR (total debt servicing ratio) splits a person’s income into 2 parts: fixed monthly employment income, and others. Only fixed monthly employment income is recognized 100%, all the rest being variable are given 30% haircut, i.e. only 70% will be taken as stable income.
One obvious requirement of TDSR-era loan application is that, a lot of paper work has to be submitted to prove your monthly financial commitments shown in your credit bureau record. So mentally prepare yourself for a bit paper work if you plan to apply for a loan
Housing loan interest rates have been steadily increasing since the beginning of 2015 and many home owners would like to refinance at fixed or stable rates while the rates are still relatively low.