||Asean Affairs 15 July 2013
No extension of total debt servicing ratio to other loan types anytime soon: Tharman
SINGAPORE: Deputy Prime Minister Tharman Shanmugaratnam said the total debt servicing ratio for home loans will not be extended to other types of loan "anytime soon".
But it is for banks to factor it into their own assessments, he said.
Mr Tharman, who is also finance minister, was speaking at a community event for pet lovers in Jurong on Sunday.
The new rule kicked in last month, where those who apply for a home loan will have their entire debt profile taken into account.
This includes other mortgages, car or personal loans.
The total debt repayment must not exceed 60 per cent of the borrower's monthly income.
Mr Tharman said the ratio is a long-term measure that is unlikely to be changed quickly, or too often.
He said: "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."