Are You Over-leveraged On Your Mortgage?

Picture of Goh Weihan
Goh Weihan


Since 2019, much of the global economy has been ravaged and disrupted by Covid-19 or so we thought. In a recent surprise move by the Monetary Authority of Singapore (MAS), Singapore’s monetary policy was tightened through the appreciation of the Sing Dollar, citing a highest inflation in 9 years.

Adjustment of monetary policies is usually less intrusive but just one of the many instruments in the Government’s repertoire. What we feel will impact Singaporeans most will be the adjustment of fiscal policies and there are many indications of ‘double tightening’ in 2022. Hence, this begs the question: “Are you over-leveraged?”

Reduction in Loan-to-Value

Prior to above’s measure, on the night of the 15th of December 2021, without warning, the Government implemented a round of cooling measures to combat the overheated property markets. Whilst we have yet to see an immediate impact as prices are still climbing, these couple of back to back policies revisions serve as a fore-warning of what is to come.


We have received repeated reminders by our Prime Minister that the 2% GST hike has been delayed long enough and we should expect it sooner, rather than later. Stay Tuned to Budget 2022 on the 18th of February for further details. An additional 20 cents per $10.00 spent may not sound like much, however, everything adds up and it gets significantly larger on big ticket items.

Interest Rates Hikes

Lending rates have been at historical lows for some time now and Singaporeans might be experiencing the ‘frog in boiling pot’ syndrome, overreaching with their property purchases . However, with the Fed announcing significant rate hikes within this year itself, Singapore’s SORA will undoubtedly follow suit and property being a large ticket item will definitely see a significant impact on monthly mortgages. 

Below are some simulated scenarios and the impact could be anywhere from low hundreds to a few thousand every month. 

TypeEst priceLoan amountTenure
2BR $          1,200,000.00 $    900,000.0030
Interest ratesMortgage (monthly)Difference
TypeEst priceLoan amountTenure
3BR $          1,700,000.00 $ 1,275,000.0030
Interest ratesMortgage (monthly)Difference
TypeEst priceLoan amountTenure
4BR $          2,300,000.00 $ 1,725,000.0030
Interest ratesMortgage (monthly)Difference

Most realtors will generally profile their clients’ risk appetite to provide our best advice, as properties for own-stay and investments have very different  considerations. If you are currently shopping around for your next home or would like some guidance, do reach out to us.

What’s Next

As there is much uncertainty moving forward, we do suggest reaching out to your personal banker or mortgage specialists for professional advice to lower your exposure!

You might also enjoy

X-value and Should You Use It To Sell Your Home?

X-value and Should You Use It To Sell Your Home?

Should X-value be used to price your home? Only when certain criteria are met. Read to find out more.
Singapore's Real Estate Prices Will not Crash in 2023, Here's Why

Singapore's Real Estate Prices Will not Crash in 2023, Here's Why

Leading up to 2023, the market has been flushed with negative news of the impending recession and high interest rates,…
Real Estate in 2023: Fears & Opportunities

Real Estate in 2023: Fears & Opportunities

Should you put your purchase decisions on hold due to an impending recession & high interest rates? Confused with mixed…