The Monetary Authority of Singapore (MAS) has suggested that banks and other financial institutions provide a standardised fact sheet when marketing loans for residential properties to consumers.
The central bank published a consultation paper seeking feedback on its proposal. The deadline for the submission of public feedback is 22 July.
“A residential property loan is a long-term financial commitment. The current low global interest rate environment will not continue indefinitely. The fact sheet is intended to help consumers understand that higher interest rates could have severe implications if they overextend themselves,” MAS said in a statement.
The central bank noted that the fact sheet must contain essential information that will help the consumer decide on whether or not to take up a residential property loan.
Among the specific information that a fact sheet must have are the tenor of loan, loan amount, lock-in period (if applicable), whether the financial institution has the right to change the interest rate, the monthly and annual repayment amounts, monthly instalments at different interest rate levels (including past trends in the benchmark rate of the loan), fees payable and links to MoneySENSE-Association of Banks in Singapore (ABS) and CPF websites.
The central bank has also mandated that the fact sheet must be presented by the financial institutions to their customers when they discuss the key features of the loan for public or private residential property purchases in Singapore.
“This is a good initiative which will further enhance transparency and consistency in providing pertinent information to customers for residential property loans,” said Helen Neo, Head of Consumer Banking at Maybank Singapore.
“As an industry measure, it will promote customer education at a faster pace with common terminology and similar presentation of information being applied across all financial institutions,” she added.
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