NANYANG BUSINESS SCHOOL
MORTGAGE LOAN TENURE PREFERENCES AND
IMPACT OF PROPERTY COOLING MEASURES
Supervised By: Dr. Kong Yoon Kee
Applied Research Project submitted to the Nanyang Business School, Nanyang
Technological University in partial fulfillment for the double degree of Bachelor of
Accountancy and Bachelor of Business.
Academic Year 2012/13
Word Count: 6,914
UOB recently promoted a 50-year loan to increase affordability of monthly mortgage
payments. In a move to promote financial prudence, MAS introduced measures to limit
loan tenure to 35 years explicitly. Our study focuses on the mortgage loan tenure
preferences and the impact of the new property cooling measures in Singapore.
Research shows little prior studies on mortgage loan tenure preferences in Singapore.
Based on past findings in other countries, this paper examines 6 common factors
influencing loan tenure preferences, namely: housing prices, interest rates, presentation
of financial information, purpose of property, income and education. This will be
examined in the paper through 7 hypotheses.
Our survey results from a target sample size of 500 show that all the above factors
influence the choice of loan tenure. From our analysis, it is observed that a longer loan
tenure is preferred at higher housing prices, lower interest rates and for those with lower
income. However, a trend is not found for education. Results also show that the new
regulation has minimal impact, as most Singaporeans are already quite prudent in their
selection, with 25-year loans being more preferred than a longer one.
We will also discuss the implications of our findings and provide recommendations to
relevant stakeholders. From our analysis, we recommend lenders to promote longer loan
term to property investors, as long-term loans are preferred for investment property. We
also recommend borrowers to diversify... [continues]
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"MORTGAGE LOAN TENURE PREFERENCES AND IMPACT OF PROPERTY COOLING MEASURES." StudyMode.com. 10, 2013. Accessed 10, 2013. http://www.studymode.com/essays/Mortgage-Loan-Tenure-Preferences-And-Impact-39335686.html.