Written Answer to Unanswered Oral Question

Reverse Mortgages for Seniors

6 February 2017 · Prime Minister's Office

Speakers

Tharman Shanmugaratnam (Deputy Prime Minister and Coordinating Minister for Economic and Social Policies) Lim Biow Chuan (Deputy Speaker)

Transcript

57 Mr Lim Biow Chuan asked the Prime Minister whether there are plans to assist seniors to monetise their immovable assets by allowing financial institutions to provide reverse mortgages.

Mr Tharman Shanmugaratnam (for the Prime Minister): Financial institutions (FIs) used to offer reverse mortgages (RMs) to borrowers, but they have stopped because of low demand. Low demand for reverse mortgages is not unique to Singapore. In the United States, only 2% to 3% of eligible homeowners take up reverse mortgages.2

Notwithstanding, property owners have other options to monetise their properties – rent out a spare room or the entire property, right-sizing possibly with the Silver Housing Bonus, or apply for the Lease Buyback Scheme. Private property owners may also obtain mortgage equity withdrawal loans, subject to FIs’ credit assessment and underwriting standards.

As our population ages, behaviour patterns may change. The Government will continue to review its policies to see if more monetisation options can be facilitated.