Reply to Parliamentary Question on allowing financial institutions to provide reverse mortgages
NOTICE PAPER 516 OF 2017
FOR THE SITTING ON 6 FEBRUARY 2017
QUESTION NO 901 FOR WRITTEN ANSWER
Date: For Parliament Sitting on 6 February 2017
Name and Constituency of Member of Parliament
Mr Lim Biow Chuan, MP, Mountbatten SMC
To ask the Prime Minister whether there are plans to assist seniors to monetise their immovable assets by allowing financial institutions to provide reverse mortgages.
Answer by Mr Tharman Shanmugaratnam, Deputy Prime Minister and Minister in charge of MAS:
1 Financial institutions (FIs) used to offer reverse mortgages (RMs) to borrowers, but they have stopped because of low demand. Low demand for reverse mortgages is not unique to Singapore. In the United States, only 2-3% of eligible homeowners take up reverse mortgages1.
2 Notwithstanding, property owners have other options to monetise their properties – rent out a spare room or the entire property, right-sizing possibly with the Silver Housing Bonus, or apply for the Lease Buyback Scheme. Private property owners may also obtain mortgage equity withdrawal loans, subject to FIs’ credit assessment and underwriting standards.
3 As our population ages, behavior patterns may change. The Government will continue to review its policies to see if more monetisation options can be facilitated.