5 Ways To Manage Your Mortgage If You Lose Your Job (2023)

Eugenia Liew
5 Ways To Manage Your Mortgage If You Lose Your Job (2023)
Compared to many countries, Singapore has handled the COVID-19 crisis admirably. We don’t mean to be grim, but that said, Singapore’s slowing growth means we are at risk of a technical recession in 2023 and we must be prepared for the unexpected.
With such uncertainty still lingering, many are wondering how they would cope with their mortgage payments if they are forced to take a pay cut, or worse – lose their job.
If this happens to you, the truth is that there are no easy fixes. But here are five things you should do immediately.

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5 Things to Do For Your Mortgage If You Lose Your Job

1. Cut Back On All Unnecessary Expenses

Your immediate priority should be reducing your cash ‘burn rate’, to use a popular phrase in the start-up world. Depending on your individual financial situation – such as the amount of debt repayments and the strength of your support network – how much you will have to cut back will vary.
But what shouldn’t vary is the process. You should undertake a comprehensive budget review of every single household expense you have and go through it line-by-line to see where you can cut back. You might have to replace that gym membership with bodyweight home workouts and use YouTube instead of Netflix.

2. See If You Can Alleviate The Pressure Using Your CPF Funds

We’ve previously discussed whether you should use your CPF Ordinary Account (OA) savings to service your home loan. The conclusion was that you can, but you have to make sure those choices are in line with your personal and financial goals.
If you’ve lost your job, financial survival is likely to take top priority, and this might mean sacrificing longer-term returns to get through the near-term storm. If you have accumulated sufficient CPF OA funds, don’t be afraid to tap into them to alleviate the pressure.

3. Have a Discussion With Your Bank on Potential Relief Measures

It’s never easy to confront your financial distress, but it’s a needed conversation. So, if you are struggling to make your monthly mortgage repayments, don’t be afraid to contact the bank to explore your options. There is nothing to be anxious about – generally, the banks will want to help.
Ask them if you can renegotiate interest rates and prepare beforehand by familiarising yourself with all the reliefs the government is offering from this aspect. This could mean a loan deferment, extensions, and instalment reductions.

4. Consider Renting Out a Room for Additional Income

We all value our privacy and convenience, but when a drastic situation like a sudden job loss occurs, having a tenant can be helpful. Depending on where you live, renting out a room could net you anywhere from a few hundred to well over a thousand dollars in additional income per month.
Keep in mind that if you live in an HDB flat, it must be a 3-room or bigger to rent out spare bedrooms. Further, the lease period must have a minimum of six months.

5. Think About Moving To A Smaller Home

If the other options listed above just aren’t enough, then you may have to consider moving to a smaller property. Your current home may have been a good financial fit for you and your family previously, but this could very easily change the moment you lose your job and/or income – especially if your ability to finance it depended largely on your monthly salary.
This could mean renting out your entire property and then renting a cheaper, smaller unit (or staying with friends or family). Or it could mean selling your property altogether. Without knowing your personal financial situation, we cannot decide for you.
Just remember, this measure is meant to help you tide through a difficult time. As the job market recovers, it is always possible for you to get back on your feet.

What Happens If You Really Cannot Pay?

While the options above will help, it never hurts to be prepared for the worst-case scenarios. In this context, they would be either foreclosure or bankruptcy. Let’s briefly examine the implications of each.


Foreclosure happens when the bank takes possession of your mortgage’s collateral – your property – and auctions it off to recoup the loan amount. There are rules dictating the property disposal (i.e. the auction), and any difference between the sale price and the outstanding liability (how much is owed) is due to the mortgagor (i.e. you). In Singapore, the lender must obtain a court order to undertake a foreclosure.


You can file for bankruptcy in Singapore if you are unable to repay debts exceeding $15,000. While creditors cannot repossess your HDB flat if you are bankrupt and sell it off to repay your debts, the owner of your mortgage – either a bank or the HDB – still has the legal right to foreclose. Thus, if your mortgage is the only debt you are worried about, it is rather pointless to declare bankruptcy.

Manage Your Home Loan by Refinancing Early

The truth is that while there are steps you can take to alleviate pressure from your mortgage if you lose your job, there will be no quick or easy fix. So, if you have the chance to lower your monthly mortgage payments – such as by refinancing your home loan – it might be prudent to do so.
Don’t wait until it’s too late – refinancing will be more difficult if you are trying to do so when unemployed. If you need more help or want objective and personalised financial advice, our friendly mortgage experts will be happy to give you a call, at no cost!
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This article was written by Ian Lee, an ex-banker turned financial writer who hopes to use his financial background and writing skills to help raise people’s financial literacy levels – a necessity in our modern world.
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