No need for 50-year HDB loans: Khaw

ALL content used in this not-for-profit blog remain the property of their respective owners.
http://www.todayonline.com/Singapore/EDC120814-0000029/No-need-for-50-year-HDB-loans--Khaw

The Housing and Development Board (HDB) does not offer 50-year loans as "they are not necessary", said National Development Minister Khaw Boon Wan yesterday.

Deputy Prime Minister Tharman Shanmugaratnam also warned of "adverse implications" for borrowers, the property market and banks if 50-year home loans - which are offered by a bank here - become widespread.

Mr Khaw's comments were made in a written parliamentary reply to Mr Chen Show Mao, Member of Parliament for Aljunied Group Representation Constituency, who asked what would be the likely effect of 50-year home loans on the prices, financing and affordability of HDB flats.

"We price BTO flats to be affordable, well within one working lifetime. There is no need for working couples to take 50-year mortgages to buy HDB flats," said Mr Khaw.

Last month, United Overseas Bank reportedly started offering 50-year home loans.

In response to questions filed by Mountbatten MP Lim Biow Chuan and Pasir Ris-Punggol GRC MP Penny Low, Mr Tharman, who is also Finance Minister, noted that the 50-year mortgage product is "currently offered by one bank and the take-up rate has been low". "But if it becomes more widespread, it could have adverse implications for borrowers, the property market and banks," he cautioned.

Mr Tharman reiterated that the Monetary Authority of Singapore will "carefully monitor mortgage tenure in the context of how banks structure their mortgage products, as well as the banks' underwriting standards".