Targeted Measures to Ease Short-term Financial Strain on Heavily Leveraged Homeowners

Mr Yip Hon Weng asked the Prime Minister and Minister for Finance given the Middle East conflict's anticipated impact on rising global interest rates and mortgage repayments (a) whether the Ministry has considered introducing targeted measures to ease short-term financial strain on heavily leveraged homeowners, particularly recent buyers; and (b) what are the key considerations in the Ministry's approach to supporting affected homeowners.

The Monetary Authority of Singapore (MAS) and the Housing and Development Board (HDB) have in place safeguards to pre-empt over-borrowing for property purchases, as well as strengthen borrowers' resilience to rising interest rates. The calculation of the Total Debt Servicing Ratio by banks incorporates an interest rate floor to determine loan affordability to guard against excessive leverage when interest rates are low. This applies to mortgage loans for both private property and HDB purchases. For HDB loans, HDB assesses the loan quantum carefully and offers concessionary mortgage loans to HDB flat buyers. The impact of rising interest rates is mitigated by the peg of the HDB mortgage loan to the Central Provident Fund Ordinary Account interest rate.

Interest rates have remained stable in Singapore. However, as the global situation remains uncertain, we urge home buyers to exercise prudence in their home-buying decisions.