MAS has proposed that financial institutions provide consumers with a fact sheet (in a standardized format) when marketing residential property loans to them.
The fact sheet will contain the following information:
a) tenor of loan, loan amount, lock-in period (if applicable), and whether the FI has the right to vary the interest rate;
b) monthly and annual repayment amounts;
c) monthly installments at different interest rate levels and past trends in the benchmark rate of the loan;
d) fees payable; and
e) links to MoneySENSE-Association of Banks in Singapore (ABS) and CPF websites which guide consumers to online resources for information relevant to their home loan decisions.
I think the part on monthly installments at different interest rate levels is particularly important. With interest rates at an all time low now, some people might not be aware of how much their monthly loan install can balloon to should interest rates go up.
This proposal is probably another measure to prevent people from taking a housing loan that might be too high.
The complete details of the proposal and a sample copy of the fact sheet can be found here:
Comments and views on this proposal can be submitted via email to MAS at [email protected] by 22 Jul 2011.