On 9th of December 2013 The government has introduced three measures to refine its Executive Condominium
There are 3 parts to this new cooling measures.
1. Reduce EC Cancellation Fees from 20% to 5%
2. Resale Levy for Second-Timer Applicants, similar to second-timer applicants who buy BTO flats.
(Above 1 & 2 applies to EC land sales which is launched on or after 9 Dec 2013.)
3. Revision of Mortgage Loan Terms
(3 applies to Option to Purchase which is granted on or after 10 Dec 2013)
Please visit MND Newsroom for more details.
The cancellation fee for ECs is currently set at 20% of the purchase price, similar to those for private housing. By reducing the cancellation fees for ECs from 20% to 5% of the purchase price, this will relieve the financial burden of buyers who have to cancel their EC bookings after signing the Sale & Purchase Agreement. Especially for the young couples who subsequently are not able to proceed with their marriage and hence the EC purchase. However this is only applicable to Ecs land sales on or after 9th of Dec 13.
Currently, second-timer applicants who buy EC units directly from property developers benefit from the lower EC prices arising from the initial eligibility and ownership restrictions imposed on EC purchases and they do not need to pay a resale levy. However now for ECs land sales on or after 9th of Dec 13 all the second-timer applicants who buy EC units directly from property developers are required to pay a resale levy.
The Monetary Authority of Singapore (MAS) will cap the Mortgage Servicing Ratio (MSR) for housing loans granted by financial institutions for EC units bought directly from property developers at 30% of a borrower’s gross monthly income. This is in line with earlier measures introduced by the HDB and MAS to encourage financial prudence among buyers of public housing. It discourages EC buyers from over-stretching their finances and supports an affordable and sustainable EC market.
The 30% MSR cap will apply to EC purchases where the Option to Purchase is granted on or after 10 Dec 2013.
Example of estimated Loan Amount per month base in income:-
$5k – $1500
$8k – $2400
$10k – $3000
$12k – $3600
* For more accurate information, please contact any of the Bankers listed below
With this measure in place, its advisable to ask for a free loan access by Bankers to access the loan quantum that you are eligible to take up. Even if you have done an IPA before its best to redo a new application as the 30% MSR Cap will affect most buyers.