The 60 percent cap on the Total Debt Servicing Ratio (TDSR) will not be expanded to include non-property loans anytime soon, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam, who is also Chairman of the Monetary Authority of Singapore (MAS).
“We don’t intend to, any time soon, extend the TDSR to other types of loans, but it’s really for the banks to factor it into their own internal assessments,” said Mr Tharman on the sidelines of a community event in Jurong yesterday.
"Supervision is more useful when it comes to the broad range of loans, not just more and more rules.”
Implemented at the end of last month for all property loans, the new ruling takes into account the borrower’s total debt obligation including mortgages as well as car, student and personal loans.
The latest loan-to-ratio cap is expected to be a long term measure.
"There’s no hard data on this but our rough assessment is that five to ten percent (of borrowers) are at risk of having over-leveraged, bearing in mind that interest rates are going to rise, and you can’t say for sure what the economy will be like, what unemployment will be like, a few years down the road," he added.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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