90% mortgages- do they still exist?

[Ahyah]

Aye, you a bit stupid is it?
.5% of 900k is the same in every country la, maybe difference currency same %.

You think if you take a mortgage in another country at a .5% rate difference your payments towards interest will be less?
In Europe 0.5% is less than in Singapore isit? Their math different cos of the gravitational pull ah? STOOOOOPID!!!!!

Anyway, this has nothing to do with market sustainability. Who said Singapore market cannot sustain? We're working out if it is worth it to go for a higher loan than 80%. If the OP wants to pay 57% more every month it's up to him, if the bank approves his 90% loan obviously it's sustainable on his income to repayment ratio.

It is in fact a good thing that local banks are conservative with giving out mortgages, unlike other contries I shall not name who have been issuing mortgages of 3x or 300x the value of the property to people with earnings 30% of the repayment rate.

This suprised me, it's not a bad rate difference.
Still;
1.25% on 800k = 10k
1.75% on 900k = 15.75K

This is the clear indication of how fagile the Singapore property market is. Just a .5% increase in interest rates equals a 50% increase in repayments.

The market cannot sustain an even slight interest rate increase and yet the global economy is about the go north on rates.

tsk tsk tsk MAS. oohhhh MacGoo you've done it again!!!

[but]

It is in fact a good thing that local banks are conservative with giving out mortgages, unlike other contries I shall not name who have been issuing mortgages of 3x or 300x the value of the property to people with earnings 30% of the repayment rate.

Banks are giving out loans at low rates. This is what caused the USA property collapse. Its just that Singapore did not learn.

[Ahyah]

Disagree, low interest rate were not one of the causes but that mortgage rates were adjustable. While this is true in Singapore to floating/variable rate packages, but only to an extent, even in those packages they tell you how much your intrest rate will be for the term of your loan. (about .25% increase PA) Fixed & capped rate mortgages are available and you are only locked into the mortage for a specified duration.

The other causes were borrowers overextending, predatory lending, speculation and overbuilding during the boom period, risky mortgage products, high personal and corporate debt levels, financial products and concealed the risk of mortgage default, monetary policy, international trade imbalances, government regulation (or the lack thereof), lack of liquidity.... Blahhhhhhh

Other than Banks Suck, none of the rest applies to Singapore.

Anyway, I don't want to argue with you on this thread. Post on "Kubes MAS Muppets should increase interest rates by introduce adjustable rate mortgages, trick Singaporean into overextending themselves and create a mortgage crisis in Singapore" thread.

Besides, I'm not a mortgage banker la, if OP is taking a loan he has to read the terms and do his own math. I'm just trying to be helpful, you behave like I'm trying to sell him Lehman notes.

It is in fact a good thing that local banks are conservative with giving out mortgages, unlike other contries I shall not name who have been issuing mortgages of 3x or 300x the value of the property to people with earnings 30% of the repayment rate.

Banks are giving out loans at low rates. This is what caused the USA property collapse. Its just that Singapore did not learn.

[but]

rates may rise by over 2% over the next few years

[Ahyah]

If you think so, get a fixed rate mortgage.

rates may rise by over 2% over the next few years

[but]

if rates go up by 2% then the amount that people can borrow will be halved so the value of Singapore property will collapse by 50% over the next 2 years

[b/subprime]

It is in fact a good thing that local banks are conservative with giving out mortgages, unlike other contries I shall not name who have been issuing mortgages of 3x or 300x the value of the property to people with earnings 30% of the repayment rate.

Banks are giving out loans at low rates. This is what caused the USA property collapse. Its just that Singapore did not learn.

It was as much the low loan rates as the fact the banks would lend to anyone, even those with no deposit, no credit history, no job even and no chance of keeping up the payments. They knew some sucker would be packaging the loan into a AAA-rated structured product. It really was criminal, but it's hugely different in Singapore.

Property prices rise because people with good credit and big deposits decide to bid higher for a limited supply of housing. Of course the market can tank in months, too. But low rates aren't the problem here (unless they raise the rates above 7-8% in which case this place is screwed-but the govt knows that.)

[Ahyah]

Stop baiting me la, I said I don't want to argue with you. You know I can't help myself isit?

GDP & earnings also can double in 2 yrs rite? Can lose your job, can win the lottery, can rent out your apartment if you can't afford it and take a smaller place. Stock market can crash can go up. Maybe there a 3rd world war. Maybe in 2 yrs, OP will have sold his place for a modest tax free profit...

I have no idea what the future holds, I'm personally very conservative. I would go with taking the lowest loan possible on your primary property and make sure it is WELL within your means.

My primary property has only a small mortgage on it (about 15% of valuation) and yes for my 1st property, I had plenty of help from my family.

All my mortgages are insured in case of disablity! My monthly payments do not exceed 30% of my FIXED income (mine not household). I have enough savings that if interest rates go up to an unacceptable level, I can pay down a huge chunk of my existing mortgages. I see no shame in begging family for help in a worse case scenario. I'm not Singaporean but very localized and like most of the population VERY VERY KIASU. Oh yeah, I'm PR so I have CPF as well.

At the current rates, it's better to borrow on my secondary/investment properties to the maximum (80%) at the lowest rate of interest (>2%) and so I do.

Agree or disagree, this is me personally, I'm NOT in any way insisting my way of investing/borrowing is correct.

It is unlikely a large % of the population is overextended on property loans, given the factors involved in getting approval.

For 1, your repayment amount (of ALL loans, including car, personal, renovations) cannot exceed 30%/40% of your fixed income, not including bonuses and other income (profits from sales, rental etc.)

The rest I have stated above, perfect credit rating (even 1 late or roll over payment in the last 3yrs on your credit card affects your approval), etc, etc...

Now, in the unlikely event that some person managed to get a loan that he/she could not afford to make payments on (or not get a loan and went ahead and purchased on option) and is unable to sell the property to repay their debt. I said to them, TOO BAD, who ask you to be so greedy and buy such an expensive property.

If the market collapses and everyone who owns property in Singapore is now sitting on worthless bits of concrete because the whole country has collapsed, no one will rent, no one will live in it... Like has happened in some areas of US, then too bad la. What can we do. Maybe the banks will go bankrupt and I don't have to make my mortgage payments as well. Haha.

If that's your opinion of the market in Singapore stay away from it, it's not my opinion.

'Sides, I was careful to state in my initial post, if OP does not have enough cash for the 10% WAIT.