SINGAPORE (CNA) – The stress of paying for a house seems to be rising in tandem with home loan interest rates, according to a bank’s financial survey. But banks and analysts who spoke to CNA said mortgage foreclosures are rare in Singapore, and lenders said they would do their best to support those facing financial difficulties in a challenging economic environment.
A Financial Wellness Index report released by OCBC on Tuesday found that 40 per cent of Singaporeans face “some difficulties in paying off their mortgage loans”. This was an increase from 31 per cent of Singaporeans who faced such “mortgage stress” in 2021, said the bank.
“More Singaporeans are unable to pay their loans on time (14 per cent versus nine per cent in 2021), with more indicating they would have to sell or downgrade their homes to pay their loans (eight per cent compared to six per cent in 2021),” said OCBC in a media release.
At DBS, the bank has not seen “delinquencies owing to higher home loan interest rates”, a spokesperson told CNA.
“That being said, the bank already has measures in place to help our customers manage their home loan repayments in the event of unexpected financial difficulties,” said the DBS spokesperson.
“We may review our customers’ loan terms and explore options that can support their affordability, such as extending their loan tenors which would help bring down the cost of monthly repayments.”
DBS added that it recently launched a POSB HDB home loan which offers an interest rate of 2.6 per cent per annum, similar to the current Housing and Development Board concessionary home loan rate.
This is to “help eligible borrowers who earn less than SGD2,500 a month tide over inflation and rising home loan interest rates”.
A spokesperson for UOB said the proportion of borrowers at their bank impacted by rising interest rates was “insignificant compared to the total mortgage portfolio of the bank”.
“UOB will do our best to assist customers facing difficulties with their loan repayments,” the spokesperson said. “We will speak to them to gain a better understanding of their situations, and propose options catered to their specific circumstances.”