From December 15, the 50-year limit on the sum of property age and the tenor of the mortgage loan under the mortgage insurance programme will be expanded to a maximum of 55 to 60 years. The Mortgage Corporation added that the maximum loan-to-value ratio will also grow from 85% to 95%.

Based on Rating & Valuation Department statistics, 38% of residential housing stock in the private sector was 25 years old or more at the end of 2003.

The expansion will facilitate potential buyers of well-maintained old-aged properties to obtain mortgage loans of a longer tenor and reduce the monthly repayment burden. For instance, with a loan size of $2 million and a mortgage rate of Prime-2.8%, an extension in loan tenor by 10 years (from 20 to 30 years) will reduce the monthly repayment amount by 26% from $10,308 to $7,594.

Rehabilitated premises also covered

The expansion will also cover mortgage loans secured on properties rehabilitated under the Building Rehabilitation Trial and Building Rehabilitation Loan Schemes administered by the Urban Renewal Authority.

The combined age of property and loan tenor is capped at 60 years for mortgage loans on the rehabilitated properties and up to a maximum loan-to-value ratio of 85%.

The corporation will accept applications under the expanded programme with effect from December 15. Each application will be reviewed on a case-by-case basis to determine whether the maximum combined age and tenor or maximum loan-to-value limit is applicable.

Interested homebuyers can approach their banks or call the hotline at 2536 0136 for enquiries.