The Monetary Authority of Singapore (MAS) introduced new measures to cool the property market yesterday.
Home buyers looking to secure loans of more than 30 years will now have to fork out 40 per cent of the purchase price as down payment.
Of that, 10 per cent must be in cash.
In its statement, MAS said: "Over the last three years, the average tenure for new residential property loans has increased from 25 to 29 years.
"More than 45 per cent of new residential property loans granted by financial institutions have tenures exceeding 30 years."
MAS said it has to act, with low interest rates globally and in Singapore likely to persist for some time.
The statement continued: "It will continue to spur demand in the residential property market, pushing up prices beyond sustainable levels. The eventual correction could be painful to borrowers and destabilise the economy."
Potential home buyers are now certain that they will stay away from loan tenures that are beyond 30 years.
Mr Chua Yew Seng, 23, a final-year student at the National University of Singapore, is thinking of applying for a flat at Sengkang or Buona Vista next month.
He set a budget of $500,000 for his home and said he would have to take a loan tenure of less than 30 years to finance his flat.
Mr Chua said: "If I have to fork out 40 per cent, it's definitely impossible."
Ms H.X. Kwan, 22, who is looking for a place with her boyfriend, also thinks that a longer loan is not ideal.
She said: "I won't want to be paying off a loan when I'm near retirement. At that stage, I should be saving up for my dependants."
MAS said long tenure loans pose risks to both lenders and borrowers.
Borrowers may over-estimate their ability to service the loans, and take a bigger loan than they can really afford.