Written reply to Parliamentary Question on home mortgage loans
Date: For Parliament Sitting on 8 May 2023
Name and Constituency of Member of Parliament
Mr Saktiandi Supaat, Bishan-Toa Payoh GRC
To ask the Prime Minister (a) how many Singapore homeowners refinanced their home mortgage loans in the past 12 months; (b) what is the average increase in monthly home mortgage payments (i) in absolute terms (ii) as a percentage of monthly income; and (c) whether the Government is considering any measures to help Singapore homeowners with the sudden spike in interest rates.
Answer by Mr Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS:
1. Close to 27,000 homeowners with a mortgage from financial institutions (FIs) refinanced their mortgages in the 12 months from March 2022 to February 2023. These refinanced mortgages account for 6% of the total number of outstanding mortgage loans.
2. MAS has estimated that the increase in mortgage payments for these borrowers was approximately $240 on average, or about 2% of their monthly income. The average monthly income of the 27,000 homeowners who refinanced their loans had increased by about 10% over the last 3 years. This would have helped cushion the increase in their mortgage payments.
3. Most borrowers have been generally prudent and hence are able to cope with the rise in mortgage payments. MAS’ move in September 2022 to raise the interest rate used to calculate the total debt servicing ratio has also helped to encourage prudent borrowing.
4. MAS however encourages the small number of borrowers who face repayment difficulties to approach their lenders early. For HDB homeowners facing difficulties, government agencies have implemented various measures to help them service their housing loans. Member may wish to refer to the written answer by the Minister for National Development to a similar question posed in March this year for more details on these measures, and the recent speech by the Minister for Finance at the Debate on President’s Address for more information on measures for Singaporeans who need support.