Flexibility to Refinance Private Properties arising Due to Medical Emergencies for Those Aged over 70 Years
Prime Minister's OfficeSpeakers
Summary
This question concerns a request by Mr Christopher de Souza for more flexibility for seniors over 70 to refinance private properties to address medical emergencies or investment needs. Deputy Prime Minister Tharman Shanmugaratnam responded that mortgage equity withdrawal loans are exempt from the total debt servicing ratio framework if the loan amount is less than 50% of the property's value. He clarified that the Monetary Authority of Singapore sets no age limits on borrowers and allows joint borrowers who are not property owners to facilitate credit assessments. Deputy Prime Minister Tharman Shanmugaratnam also cited alternative options like renting, right-sizing, and the HDB Lease Buyback Scheme for monetising assets. The Government continues to review these measures to ensure they support the retirement needs and cash flow requirements of elderly Singaporeans.
Transcript
2 Mr Christopher de Souza asked the Prime Minister whether the Government will consider introducing more flexibility for those aged over 70 years to refinance their private properties so that they can invest more or tide over cash flow problems that may arise due to medical emergencies.
Mr Tharman Shanmugaratnam (for the Prime Minister): The Government has introduced several measures over the years to help Singaporeans monetise their housing assets so as to meet their financial needs.
In March 2017, the Monetary Authority of Singapore (MAS) announced that mortgage equity withdrawal loans need not be subject to the total debt servicing ratio framework if the loan amount is less than 50% of the market value of the property. This measure is particularly relevant to retirees who wish to monetise their housing assets.
MAS has also not set any age limit on borrowers who can apply for mortgage equity withdrawal loans. However, like all loans, financial institutions will conduct credit assessments and, in some cases, they may request for a joint borrower or guarantor to be named. To facilitate such loan arrangements, MAS does not require that a joint borrower of a mortgage equity withdrawal loan be the owner of the underlying property.
We encourage individuals facing cashflow pressures to discuss with their financial institutions the possible relief options.
Besides mortgage equity withdrawal loans, there are other ways for older Singaporeans to monetise their housing assets, such as renting out the property or a room for rental income, right-sizing, or applying for the HDB Lease Buyback Scheme.
The Government will continue to review how monetisation of housing assets can best be facilitated to support the retirement needs of Singaporeans.