Reply to Parliamentary Question on Support for Landlords in Arrears of Mortgage Payments
QUESTION NO 1649
NOTICE PAPER 665 OF 2021
FOR WRITTEN ANSWER
Date: For Parliament Sitting on 13 September 2021
Name and Constituency of Member of Parliament
Mr Chong Kee Hiong, MP, Bishan-Toa Payoh GRC
To ask the Prime Minister with regard to leases of non-residential properties (a) what is the number of landlords and units they own that are in arrears of mortgage payments since the start of the COVID-19 pandemic; and (b) for landlords who are legally obliged to give rental reliefs to support their tenants affected by the COVID-19 pandemic, whether the Government will consider mandating measures to compel banks to reduce their interest rates and waive penalties for late payments or interest expenses.
Answer by Mr Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS:
1 Since the start of the COVID-19 pandemic, MAS has worked with the financial industry on a comprehensive set of relief measures to support individuals and businesses. They have included full or partial deferrals of principal repayments on loans secured by property, both residential and commercial. The objective is to allow more time for economic conditions to normalise, so that we avoid unnecessary foreclosures on otherwise viable loans.
2 With the gradual opening up of economic activities, most borrowers have been able to resume loan repayments. Those with difficulties can apply to their banks or finance companies for relief measures. Based on the applications for assistance, the number of borrowers in difficulty has been coming down over time. Last year, banks and finance companies granted about 12,000 reliefs on non-residential property loans. Between January and July this year, they received fewer than 650 applications for payment reliefs on such loans.
3 We understand that some landlords may face cashflow constraints as a result of the mandated two-week rental waiver. The three local banks have recently reaffirmed their commitment to provide targeted assistance and restructuring solutions to borrowers.
4 Given the fall in interest rates since the start of the COVID-19 pandemic, landlords with floating rate mortgages would also have seen lower interest rates on their loans and a reduction in their debt servicing burden. Landlords with fixed rate mortgages can refinance their loans at lower interest rates, and apply to lenders for waivers of refinancing fees on a case-by-case basis.
5 Overall, we assess the current targeted relief measures to be sufficient to support the much reduced number of landlords who are facing difficulties.
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