Higher Interest Rate for Home Owners who Take Third Housing Loan from HDB

Debated in Parliament on 20 Jan 2015.

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Mr Zainal Sapari questioned the rationale for higher interest rates on a third HDB housing loan, the income profile of such applicants, and whether rates could be equalised across loans.
Khaw Boon Wan explained that HDB offers up to two concessionary loans at below-market rates, with a third loan granted only in exceptional cases at market rates to discourage resale flat churning.
He noted that third loans are typically for those in urgent housing need with poor credit but steady income, though HDB may consider concessionary rates for genuine hardship cases.

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Zainal Sapari

Mr Zainal Sapari asked the Minister for National Development (a) what is the rationale for imposing a higher interest rate for home owners who take a third housing loan from HDB; (b) what is the income profile and circumstances in which a person will be granted a third HDB housing loan; and (c) whether the interest rate can be equalised regardless of the number of housing loans taken.

Khaw Boon Wan

The Housing and Development Board (HDB) provides up to two concessionary rate loans to eligible flat buyers, with interest rate at below market rates over the long term. Under exceptional circumstances, HDB may grant a third housing loan, but it will then be at the market rate. Typically, this is for those who are in urgent need of housing but, due to poor credit records, are unable to secure a bank loan even though they have a steady income.

Providing a third housing loan at a higher rate is to discourage churning of resale flats. However, for genuine hardship cases, HDB may help with a concessionary rate loan, if the case merits such consideration.

Page: 101

Summary written by AI (learn more)

Mr Zainal Sapari questioned the rationale for higher interest rates on a third HDB housing loan, the income profile of such applicants, and whether rates could be equalised across loans.
Khaw Boon Wan explained that HDB offers up to two concessionary loans at below-market rates, with a third loan granted only in exceptional cases at market rates to discourage resale flat churning.
He noted that third loans are typically for those in urgent housing need with poor credit but steady income, though HDB may consider concessionary rates for genuine hardship cases.

Questions identified by AI (learn more)

Higher Interest Rate for Home Owners who Take Third Housing Loan from HDB | PAPERCUTS

Higher Interest Rate for Home Owners who Take Third Housing Loan from HDB

Debated in Parliament on 20 Jan 2015.

Summary written by AI (learn more)

Mr Zainal Sapari questioned the rationale for higher interest rates on a third HDB housing loan, the income profile of such applicants, and whether rates could be equalised across loans.
Khaw Boon Wan explained that HDB offers up to two concessionary loans at below-market rates, with a third loan granted only in exceptional cases at market rates to discourage resale flat churning.
He noted that third loans are typically for those in urgent housing need with poor credit but steady income, though HDB may consider concessionary rates for genuine hardship cases.

Questions identified by AI (learn more)

Full Transcript

Zainal Sapari

Khaw Boon Wan

Page: 101

Summary written by AI (learn more)

Mr Zainal Sapari questioned the rationale for higher interest rates on a third HDB housing loan, the income profile of such applicants, and whether rates could be equalised across loans.
Khaw Boon Wan explained that HDB offers up to two concessionary loans at below-market rates, with a third loan granted only in exceptional cases at market rates to discourage resale flat churning.
He noted that third loans are typically for those in urgent housing need with poor credit but steady income, though HDB may consider concessionary rates for genuine hardship cases.

Questions identified by AI (learn more)

Higher Interest Rate for Home Owners who Take Third Housing Loan from HDB

Summary

Questions Identified

Full Transcript

Zainal Sapari

Khaw Boon Wan

Summary

Questions Identified

Higher Interest Rate for Home Owners who Take Third Housing Loan from HDB

Summary

Questions Identified

Full Transcript

Zainal Sapari

Khaw Boon Wan

Summary

Questions Identified