In this investor series, we will show you how your age affects your lawn tenure. With so much volatility and uncertainty in today's market. Many would have held back and wait out to observe the market.
Does "Waiting-out" has no effect at all? Let's find out!
MAS has this regulation that maximum loan tenure is 30years and the borrowing age is up to 65 year old. So meaning, if you are 35 year old or younger, you can borrow up to maximum 30 years loan tenure.
Using today’s stress test interest rate of 4.5%, at age 35, you can afford a loan of $1.085m and a property price of $1.447million. So if you did not buy today and 3 years later, when you are 38 year old, you can only afford a lower mortgage at $1.03million and property price of $1.37m. So there’s a shortfall of $73000 in property price.
When you are 40year old, you can only afford loan of $989k and property price pf $1.32m. That is almost $128k dollars lesser in property price compared to when you are 35year old.
So if you are younger than 35year old, you still have some time to think about it. However, once you hit your 35th birthday, your mortgage loan tenure will be reducing year by year. As every year passed will means that a shorter loan tenure and you can only afford a cheaper property.
In summary, I understand that most buyers would want to wait for prices to drop, but please bear in mind of your loan tenure is reducing at the same time. It is always better to get a property at age 35 or younger, so you can enjoy the maximum loan tenure and get a bigger place that you call home.
That being said, please be prudent about your property purchase.
If you have any questions about your loan tenure or want to find out which is a better option, feel free to reach out to us.
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