National Development Minister Desmond Lee said in Parliament on Thursday (Oct 20) that a group of borrowers saw mortgage repayments rise over the past few months.
He confirmed that the rising interest rates would not affect those who have taken housing loans from the Housing and Development Board (HDB) for their mortgage repayments.
The HDB concessionary loan rate, which is reviewed quarterly, remains unchanged at 2.6 per cent per annum, said Mr Lee.
He noted that the interest rates would depend on the type of loan taken by borrowers.
For those with housing loans from financial institutions, about 80 per cent are on mortgage packages that track market interest rates, while the remaining 20 per cent are on mortgage packages that move in tandem with market interest rates, said Mr Lee.
The second group has seen an increase in mortgage repayments over the past few months.
“The proportion of non-performing mortgages among HDB flat owners has remained low and stable for housing loans extended by both HDB and financial institutions,” he noted.
“Credit measures such as the loan-to-value ratio and the mortgage servicing ratio have helped to ensure that households borrow prudently from the outset,” Mr Lee added.
Regarding the increase in interest rates, MND, HDB and the Monetary Authority of Singapore (MAS) recently announced measures to promote continued sustainable conditions in the property market.
HDB introduced an interest rate flow to compute eligible loans for housing loans granted by HDB, he noted.
“Nevertheless, we recognise that some HDB homeowners may face financial difficulties as the circumstances change, and we encourage such borrowers to reach out for assistance early.”
For HDB homeowners with housing loans granted by HDB, the agency has various financial assistance measures in place to help them, which include allowing them to reduce or defer their loan instalments for six months, pay their arrears by instalments within a reasonable period or extend their loan tenure to help reduce their monthly instalments.
HDB homeowners with housing loans from financial institutions are encouraged to approach their lenders early to explore solutions if they face difficulties servicing their loans, said Mr Lee.
“The government will continue to ensure that public housing remains affordable and accessible for all Singaporeans,” said Mr Lee. /TISG