RES exam question on Financing: A Singapore Citizen considers refinancing the mortgage on the private condominium he…
A Singapore Citizen considers refinancing the mortgage on the private condominium he lives in, moving it from Bank A to Bank B. Consider the following statements: (i) The new loan with Bank B is subject to the TDSR framework — total monthly debt obligations must not exceed 55% of gross monthly income. (ii) Refinancing resets the Seller's Stamp Duty (SSD) holding period, so selling the property shortly after refinancing may trigger SSD. (iii) If the original Bank A loan is within its lock-in period, the homeowner may incur a prepayment penalty before refinancing. (iv) The maximum LTV for the refinanced loan with Bank B is 75% of the property value, provided it is the borrower's only outstanding housing loan and regulatory tenure limits are met. Which statements are CORRECT?
- A(i) and (iii) only
- B(iii) and (iv) only
- C(iii) only
- D(i), (iii) and (iv) only
Show answer & explanation
Answer
C. (iii) only
Explanation
Only statement (iii) is correct: a loan still in its lock-in period usually carries a prepayment penalty, set by the loan contract. The 75% LTV tier applies to new loans taken to buy property.
Why the other options are wrong
- Statement (i) is wrong: MAS exempts refinancing of owner-occupied residential property from the 55% TDSR threshold.
- Statement (iv) is wrong: MAS applies no regulatory LTV limit to a refinanced housing loan, and the bank may lend up to the amount outstanding (MAS, 'Refinancing Rules for Housing Loans', as at Sep 2026).
- Statement (ii) is wrong: SSD runs from the date the property was bought, and refinancing does not affect it (IRAS, SSD).
Study the concept behind this question: Property Financing in Singapore: LTV, TDSR & MSR
Practise more Property Finance & Financial Calculations questions
Drill the full Property Finance & Financial Calculations bank with instant answers and explanations — free to start, no card needed.
Related Property Finance & Financial Calculations questions
Get each day's lesson free — one RES topic + the trap, every day on Telegram.
Join @resprepsg →Original study material mapped to the public CEA RES syllabus. Verify any rate-based figures against current IRAS/CPF/MAS rules before relying on them.