REF: Residential

Metta Lee
Mind Map by Metta Lee, updated more than 1 year ago
Metta Lee
Created by Metta Lee almost 6 years ago


For revision for common test

Resource summary

REF: Residential
1 Cost of ownership
1.1 stamp duty (provided)
1.1.1 Buyer's stamp duty For properties above $360,000 Take (AMT X 3%)-$5400
1.1.2 Additional Buyer's stamp duty For everyone except 1st time Singaporeans
1.1.3 Seller's Stamp duty Industrial Residential sold w/in 1 year means yr 0 to yr 1
1.1.4 *Always use the higher of purchase price or valuation
1.2.1 Purchase Price
1.2.2 GST
1.2.3 Property Tax
1.2.4 Legal and Conveyance Fees
1.2.5 Agency Fee/Commission
1.2.6 Valuation
1.2.7 Legal Requisitions
1.2.8 Operating costs AKA Conservacy fee in HDB
2 Calculations :)
2.1 HDB Concessionary Loans
2.1.1 LTV 90% of mkt value or vln whichever lower
2.1.2 Loan interest 2.6%/annum 0.0021667/mth
2.1.3 MSR installment cannot exceed 30% of buyer's income
2.1.4 Maximum repayment period shorter of a) 25 yrs b) 65yrs - average age of buyers if pty <60 yrs c) balance lease - 20yrs
2.1.5 Maximum Loan Quantum Lowest of A) Loan ceiling = LTV X VL 90% x VL B) VL - CPF in OA - CPF Grants - Half of proceeds* If half of proceeds <$25,000 use Total proceeds -$25,000 c) Loan required is PVOA i 0.0021667/mth N Maximum repayment period (in mths) p MSR aka principal sum
2.2 Residential Housing/Bank Loans
2.2.1 LTV see table provided BTW AVG age is income weighted That means that eg. Alex (27 yrs $2000) and Bec (24 yrs $4000) The age will be calculated as [(2000/6000)x27yrs] + [(4000/6000)x24yrs] = 25 years
2.2.2 Loan interest provided in Q BUT when calculating MAX loan quantum, use 3.5% or provided %, whichever is higher
2.2.3 TDSR total debt servicing ratio BY MAS 60% of buyer's income IMPORTANT features income weighted avg age medium term interest rate (calc max loan) For residential 3.5% or higher For non-resi 4.5 % or higher FI to discount 30% of buyer variable income Bank loan for HDB MSR of 30% to be CAPPED don't enjoy TDSR for HDB bank loan
2.2.4 Maximum repayment period Absolute at 35 years loan period will be provided in Q :)
2.2.5 may be asked Amount that must be paid in cash? COV + MCP Loan quantum Principal Amt aka PVAO Monthly installment FVAO / N Max loan quantum similar to HDB loan A) and C) Borrowing costs FVOA - PVOA Outstanding loan PVOA of remaining years PVOA but n = remaining yrs Debt service ratio (%) borrowing cost/loan amt
3 Terminology
3.1 Valuation Limit (VL)
3.1.1 The lower of the valuation and the purchase price


  • Please note that the purchase price MAY be lower at times
3.2 Cash over Valuation (COV)
3.2.1 Purchase price - valuation limit
3.2.2 Amount to be paid in cash when purchasing
3.3 Minimum Cash Payment (MCP)
3.3.1 Fixed % to pay in cash not covered by bank loan
3.4 Loan Ceiling
3.4.1 LTV x VL
3.4.2 Maximum amt allowed to borrow
3.4.3 Table provided in exam
4 6 Functions of $1
4.1 For REF
4.1.1 We need to know 4 PVOA Find PV given annuity can work backwards to find annuity given pv FVOA Find FV given Annuity FV = P x (1 + i)^n To find when installments at end of month PVAD PVOA x (1+i) FVAD FVOA x (1+i)
5 FUN FACT: No theory Q in EXAMS!!
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