Take-up Rate for Home Protection Scheme
Ministry of National DevelopmentSpeakers
Summary
This question concerns the take-up rate of the Home Protection Scheme (HPS) and whether it should be mandatory for all HDB owners with outstanding housing loans. Er Dr Lee Bee Wah inquired about current coverage and efforts to raise awareness, to which Minister for National Development Lawrence Wong stated that 92% of recent buyers with loans are covered. Minister for National Development Lawrence Wong noted that HPS is compulsory for those using CPF for loan repayments, while many others hold private insurance or join HPS voluntarily. To encourage voluntary take-up, HDB provides information through talks, booklets, and explanations at the point of purchase. The Ministry will continue to monitor the situation to assess whether further measures are necessary if the need arises.
Transcript
25 Er Dr Lee Bee Wah asked the Minister for National Development (a) what is the current take-up rate for the Home Protection Scheme (HPS); (b) whether it can be made compulsory for all HDB home owners with outstanding housing loans to take up HPS regardless of whether they are using their CPF to service the loans; and (c) what is the Ministry doing to create more awareness about the importance of HPS and similar schemes.
Mr Lawrence Wong: About 80% of HDB flat buyers in 2017 used CPF monies to service their loans. These buyers are covered under CPF Board’s policy which mandates compulsory take-up of the Home Protection Scheme (HPS) for those who use CPF monies to repay any instalment of a housing loan taken to buy an HDB flat. An additional 12% of recent flat buyers used cash to service their loans and took up HPS voluntarily. Effectively this means that around 92% of recent HDB flat buyers with outstanding loans are covered under the HPS policy, or have voluntarily taken up HPS.
Besides HPS, some home buyers may have purchased mortgage-reducing insurance (MRI) products from the private sector. We do not have detailed records of such purchases, but many commercial banks offer such MRI products as part of their loan financing package to home buyers. So the overall insurance coverage may well be higher.
HDB will continue to work with the CPF Board to further encourage voluntary take-up of HPS. For example, besides conducting regular informational talks and distributing HPS booklets to home buyers, HDB will also explain to all flat buyers the benefits and coverage of HPS at the point of flat purchase. We will continue to monitor the situation and assess whether to implement further measures if the need arises.