Question 1
Three clients ask their salesperson, in the same week, for "the longest loan the rules allow". Mr Ismail is taking an HDB housing loan on a resale flat. Ms Pereira is taking a bank loan on a resale flat. Mr Danesh is taking a bank loan on a freehold condominium. All three are in their early thirties.
Consider the following statements.
- (i) The maximum tenure available to Mr Ismail is 25 years.
- (ii) The maximum tenure available to Ms Pereira is 30 years.
- (iii) The maximum tenure available to Mr Danesh is 35 years.
- (iv) A bank loan on an HDB flat taken over a tenure exceeding 25 years attracts a reduced loan-to-value limit.
Show the answer and full explanation
Answer: D
The rule. Maximum tenures: HDB housing loan 25 years; bank loan on an HDB flat 30 years; bank loan on private residential property 35 years. A bank loan on an HDB flat over 25 years attracts the reduced LTV.
Why D is correct. All four are true — the three tenure caps and the reduced-LTV trigger for a bank-on-HDB loan beyond 25 years.
The other options.
- A drops the true (iv), the reduced-LTV point.
- B drops the true (iii), the 35-year private cap.
- C drops the true (i), the 25-year HDB-loan cap.
Exam note. 25 / 30 / 35 — HDB loan, bank-on-HDB, bank-on-private — and stretching a bank-on-HDB loan past 25 years costs LTV.
A bank loan on an HDB flat over 25 years attracts the reduced LTV →