Maximizing home loan tenure is a simple way to reduce monthly repayments, improve cashflow. It might help you navigate through TDSR. Let's find out how to stretch the tenure.
Some banks may offer you a maximum tenure for your residential home loan based on the youngest application, up to 65 or 70 years of age. If you are 65 years old and a joint applicant like your child is 35 years old, the bank may grant you a maximum loan tenure of up to 30 to 35 years. If you will retire soon, and you know your children will take responsibility of your Singapore home loan repayments, you could include them while applying for the loan. This gives you longer loan tenure with lower affordable monthly payments and a lower monthly payment for your children to make when you retire. However do remember the longer the tenure is, the more interest you have to pay.
If you are an investor, then the total interest amount you pay for your house loan in Singapore is not much of an issue. A longer loan tenure helps an investor to lower monthly repayments and obtain higher rental yields. If you are building your property empire, you could get your property loans by stretching your Singapore and overseas home loan tenures. Once the lock-in period of the loan expires, you may refinance the house that appreciates in market value and cash out on the appreciated home equity. This is known commonly as cash out, equity or term loan.
With lower repayments, your debt ratio goes down. It may allow you to apply more loans and still fall within the 60% TDSR threshold.
In short, the benefits of extending the loan tenure can be extremely useful. You can start by looking at the refinancing rates in Singapore and leave an enquiry.