By MoneyBees
The longest home loan tenure you can take on an HDB or bank loan, how tenure changes your LTV under MAS rules, and what a longer loan costs in interest.
The shortest of 25 years, 65 minus the average age of the applicants, and the remaining lease of the flat minus 20 years.
MAS caps bank housing loans at 30 years for HDB flats and 35 years for other property, such as condos, ECs and landed homes.
For a first bank housing loan the LTV limit is 75%. It drops to 55% if the tenure is over 30 years (25 for an HDB flat) or the loan runs past age 65, and the minimum cash downpayment rises from 5% to 10%.
MAS uses the income-weighted average age of the borrowers: each borrower's age times their share of the total income, added up.
HDB uses 65 minus the average age of the applicants, a plain average, not weighted by income.
It lowers the monthly instalment but you pay interest for longer, so the total interest is higher. MoneySense's example: S$600,000 at 3.5% over 20 years costs about S$3,480 a month.
HDB says you can make partial or early repayments, or shorten your repayment period, to cut the interest you pay.
Yes. An HDB loan cannot run past the remaining lease minus 20 years, and HDB lowers the 75% loan limit pro rata if the lease does not cover the youngest buyer to age 95.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).