Allow one-time transfer of bank mortgages to HDB to help some cope with high interest rates, MP suggests

THE HOUSEHOLD DEBT SITUATION REMAINS “HEALTHY”

In response to Saktiandi’s suggestions to help Singaporeans cope with rising interest rates, Minister of State for Finance Chee Hong Tat acknowledged that rising interest rates “don’t may not be a passing phenomenon”, so it is important to be prepared for change.

The government will continue to ensure that essential areas such as public housing, healthcare and education remain affordable and accessible to all Singaporeans, he said.

In public housing, the government will continue to sell new apartments below market value with substantial housing subsidies, in order to encourage home ownership and enable as many families as possible to be owners.

Mr Chee added that the household debt situation in Singapore remains “sound”, due to “cautious policies” on unsecured consumer loans as well as residential mortgages.

The recent housing cooling measures to increase the medium-term interest rate floor used to calculate the TDSR and mortgage service ratio for home loans by financial institutes, as well as the interest rate floor interest for calculating eligible loan amounts for HDB loans, are examples. policies, he said.

Responding to Mr. Saktiandi’s point about helping borrowers better understand their loan commitments, Mr. Chee said the MAS currently requires financial institutions to explain how a borrower’s monthly mortgage payments would change if interest rates change. interest increased.

Similarly, non-financial institutions such as approved lenders are required to use language that the borrower understands to explain the terms of the loan agreement and the breakdown of each repayment that goes into servicing the principal amount and other costs. .

“Furthermore, approved lenders are only allowed to charge borrowing costs and fixed interest rates, ensuring that borrowers are not caught off guard by rising interest rates,” he said. -he declares.

HELPING COMPANIES THROUGH DEVICES

Most businesses in Singapore are currently able to manage “debt risk” with sufficient liquidity alongside post-COVID profit recovery, and the government will continue to support them through various credit schemes, said Mr. Chee.

He noted that with the expiration of the temporary bridging loan scheme, businesses can still avail of the business finance scheme, which supports access to finance for a wide range of business activities.

“It is important that companies redouble their efforts to improve productivity and improve the skills of their workers. This is the most effective way to improve our overall competitiveness and achieve a win-win outcome for businesses and workers through economic growth,” he added.

For these purposes, businesses can turn to programs such as the Productivity Solutions Grant, Energy Efficiency Grant, SkillsFuture Grants, and the new NTUC Business Training Committee Grant of S$70 million. .

The government will also continue to provide a working income supplement and other support measures to increase the incomes of low-wage workers.

But while government will deal with individuals, households and businesses, Mr Chee stressed the importance of “a high degree of trust in our society”.

“Trust has allowed us to overcome many uncertainties together, including our fight against COVID-19, and it will be a key success factor as we face new challenges, such as rising inflation and rising interest rates,” he said.

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