Desmond Lee on financing HDB flat purchases amid rising interest rates

The impact of rising interest rates on HDB borrowers would depend on the type of loan packages that they have taken, says National Development Minister Desmond Lee. For those with housing loans from financial institutions, about 80 per cent are on mortgage packages that track market interest rates but with some lag. The remaining 20 per cent are on mortgage packages that move in tandem with market interest rates. The second group of borrowers saw mortgage repayments rise over the past few months, he said. Borrowers who have taken housing loans from HDB for their mortgage repayments would not have been affected by rising interest rates, as the HDB concessionary loan rate, which is reviewed quarterly, remains unchanged at 2.6 per cent per annum. Mr Lee, who said this in reply to MPs' questions in Parliament on Thursday (Oct 20), pointed out that the proportion of non-performing mortgages among HDB flat owners has remained low and stable for housing loans extended by both HDB and financial institutions. Credit measures such as the loan-to-value ratio and the mortgage servicing ratio have helped to ensure that households borrow prudently from the outset, he added.  *Audio issues inherent from source