The tougher rules on home loan financing are expected to be permanent and are a "structural measure" to ensure a more stable property market, Minister for National Development Khaw Boon Wan said on Sunday.

"So it's not really a cooling measure as such, but it's a measure which will be quite permanent," said Mr Khaw on the sidelines of the launch of the Sembawang GRC Memory Project at Fuchun Community Club. "It's a structural measure which is good to ensure a more stable property market.

"The current low interest rates are not sustainable, and we worry that people buy beyond their means."

The Monetary Authority of Singapore (MAS) announced on Friday that banks have to use a standardised set of guidelines to assess property buyers' ability to borrow. Banks will not be able to approve a loan if the monthly repayments of a buyer's total debt obligations exceed 60 per cent of his gross monthly income.

MAS also plugged a loophole that allow buyers to dodge tighter loan-to-valuation limits on their second and subsequent properties.

Mr Khaw added that the new rules are targeted at investors, and are "not an issue" for potential homeowners.

"We do have buyers stretching themselves, buying second or third properties," he said. "And these are the people we worry about because when interest rate go up and they find that they cannot afford the increased mortgage, they may be forced to liquidate."