Second home loan


If you intend to own a second property (for investment) and to take up a loan to finance the purchase, the Sunday Times has the following pointers for you:

  • ¬†Keep your debt service ratio low. Your debt service ratio is calculated by taking the sum of all your monthly loan repayments (car, mortgage, renovation, personal loan, etc), and dividing it by your total monthly income. Keep your debt service ratio below 50%.
  • Maintain good credit history. Pay your credit card bills and make loan repayments on time.
  • Show a commitment to repay. One good way it to show the bank you have enough cash to tide you through bad times.
  • Be aware of the long-term interest rate environment. A high interest rate will mean you have to fork out more per month to repay the loan.

According to the article in today’s Sunday Times, most bank customers with 2 home loans are high income earners of 6-figure salaries.


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