RES exam question on HDB Policies: Lin and her husband, both Singapore Citizens, buy a 4-room resale flat for $520,000…
Lin and her husband, both Singapore Citizens, buy a 4-room resale flat for $520,000 with an HDB concessionary loan. It is their first residential property, and they earn $9,500 a month. They ask salesperson Amir about duty and loan terms. Which of the following statements is/are correct? (i) They pay no Additional Buyer's Stamp Duty, as citizens buying their first residential property. (ii) Their loan's interest rate is pegged at 0.1% above the CPF Ordinary Account rate. (iii) They must occupy the flat for five years before they may sell it on the open market. (iv) Their monthly instalment is capped by the Mortgage Servicing Ratio at 30% of gross monthly income.
- A(i), (ii) and (iii) only
- B(i) and (iii) only
- CAll of the above
- D(ii), (iii) and (iv) only
Show answer & explanation
Answer
C. All of the above
Explanation
Answer: All of the above. Each of the four statements matches the current duty, loan, MOP and MSR rules.(i) True. Singapore Citizens pay no ABSD on their first residential property.(ii) True. The HDB concessionary rate is 0.1% above the CPF Ordinary Account rate: 2.6% while the OA rate is 2.5%.(iii) True. A resale flat carries a fresh 5-year MOP for the buyer.(iv) True. The Mortgage Servicing Ratio caps the instalment on an HDB flat loan at 30% of gross monthly income.Watch out: The $520,000 price and $9,500 income change none of the answers; the income only sets the MSR ceiling at $2,850.Rule: Citizens pay no ABSD on a first home. An HDB loan is priced off the CPF OA rate, a resale buyer serves a fresh MOP, and the MSR caps the instalment on an HDB flat loan.Source: IRAS, ABSD rates from 27 Apr 2023; HDB/CPF Board; /learn home-loan-rate-types-refinancing-singapore; HDB (MOP); MAS/HDB; /learn financing-ltv-tdsr-singapore
Study the concept behind this question: Renting Out an HDB Flat or Room: Approval, Quota, Tenants
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