Parliamentary Replies
Published Date: 05 July 2022

Reply to Parliamentary Question on encouraging banks to help retired seniors refinance housing loans




Date: For Parliament Sitting on 5 July 2022

Name and Constituency of Member of Parliament

Mr Kwek Hian Chuan Henry, MP, Kebun Baru SMC


To ask the Prime Minister whether MAS can encourage banks to help retired seniors who are above 65 years old refinance their housing loans to adjust to the changing mortgage rates as many seniors are turned down by the financial institutions for such refinancing despite having the financial means to support their repayment of loans.

Answer by Mr Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS:

1. Let me first clarify that borrowers are exempted from the total debt servicing ratio, mortgage servicing ratio and loan-to-value limits when they refinance their loans for owner-occupied properties. This helps them explore refinancing options after the lock-in period for their existing mortgages.
2. Financial institutions will conduct credit assessments on borrowers when considering their request for refinancing. Where borrowers do not have salary income, financial institutions may consider other factors such as income from rent or financial assets, a borrower’s repayment record, and the outstanding loan relative to the value of the property. Some financial institutions may also request for a joint borrower or guarantor with income to be named. This is to ensure that borrowers can continue to service their housing loans over the longer term. 

3. The local banks have committed to be facilitative to borrowers who have the financial means to refinance their property loans. We encourage borrowers to approach their lenders to discuss refinancing options when necessary.