Regulatory Alerts2013-06-28
Added · Updated
Notice 645 Computation of Total Debt Servicing Ratio for Property Loans
Banks in Singapore must compute the Total Debt Servicing Ratio for borrowers applying for credit facilities for the purchase of property, refinancing facilities for property purchases, credit facilities secured by property, and refinancing facilities for such secured credit facilities. The ratio is calculated by dividing the borrower's monthly total debt obligations by their gross monthly income, with specific aggregation rules for joint applications. Exemptions from this computation apply in cases where the borrower makes a capital repayment, maintains the same interest rate formulation without increasing tenure, reduces tenure, or commits to a Debt Reduction Plan, or where the aggregate loan amount does not exceed 50% of the property's current market valuation.
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