Quick guide to what happens when mortgage servicing ratio is limited

It's internally capped at 40-50%.

According to CIMB, MAS can choose to limit the mortgage/debt servicing ratio for mortgages. Private property loans currently have no mortgage service ratio cap even though the banks do internally cap the MSR at 40-50%. 

"Limiting the mortgage servicing ratio (% of mortgage payment to household income) or debt servicing ratio (% of total debt serviced to household income) would cap the ability of a single buyer to take up a mortgage, effectively closing the legal loophole that allows an individual to rely on a guarantor when applying for mortgage loans," CIMB said.

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