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Recently, the Monetary Authority of Singapore (MAS), the Association of Banks in Singapore (ABS) and the Finance Houses Association of Singapore (FHAS) have announced additional measures to support individuals who are suffering financially due to the Covid-19 pandemic. On top of the measures already being taken such as residential mortgage deferment that we had mentioned in our first article, this second package of measures explores relief options to other types of loan commitments, allowing individuals to continue to have access to affordable basic banking services.

Let's explore these measures together, shall we?

Objectives Relief Measures
Ease Cash Flow
  1. Defer Repayment for:
    • Commercial and industrial property loans
    • Mortgage equity withdrawal loans
    • Renovation and student loans
    • Motor vehicle loans and hire-purchase agreements, subject to assessment
  2. Extend Loan Tenure for Debt Consolidation Plans (DCPs)
Reduce Debt
  1. Refinance investment property loans, without being subject to the total debt servicing ratio and mortgage servicing ratio

(Table Source: www.mas.gov.sg)

Easing Cash Flow

Defer Repayment of Commercial and Industrial Property Loans

For this deferment, individuals with commercial and industrial property loans are able to apply to their banks or finance company to defer principal payments up to 31 December 2020.

Defer Repayment of New Mortgage Equity Withdrawal Loans

To defer new mortgage equity withdrawal loans, you are able to defer either your principal payment or both principal and interest payments if your loan/s were granted on or after 6 April 2020. This will help individuals who are experiencing temporary cash flow issues to monetise the equity in their existing properties to meet business expenses and family needs, and also to have the flexibility to make repayments at a later date.

Defer Repayment of Motor Vehicle Loans and Hire-Purchase Agreements

This deferment applies for individuals who are in need of payment deferment for their motor vehicle loans and hire-purchase agreements. For this, you can actually go to your banks/finance company to discuss repayment plans however it will only be granted on a case-by-case basis. 


Reduce Debt Obligations

Refinance or Reprice Investment Property Loans without being subject to the Total Debt Servicing Ratio (TDSR) and Mortgage Servicing Ratio (MSR)

If you have an investment property loan, you can actually apply to refinance/reprice your loans without being subjected to TDSR and MSR. If you do not meet TDSR and MSR, you would not need to commit to a debt repayment plan to pay 3% of your outstanding loan amount of over 3 years. With this you are able to lower your interest costs and debt obligations during this period. 

For more information on all the stated pointers are available at this link: https://www.mas.gov.sg/news/media-releases/2020/mas-and-financial-industry-provide-additional-support-for-individuals.