Despite the decline of debt-to-income ratio by 2.1 percent in 2012, one in five borrowers has loan repayments of between 40 to 60 percent of the monthly income, the Monetary Authority of Singapore (MAS) revealed.

Responding to a parliamentary inquiry held last week, MAS said Singapore’s debt-to-income ratio declined in the second half of the last decade. However, it has been increasing slightly since 2009 due the flourishing property sector back then.

Last year, the agency warned that five to 10 percent of Singaporean mortgage holders were overburdened, with loan repayments surpassing 60 percent of their monthly incomes.

However, those borrowers mostly comprise Singaporeans who earn more than the national monthly median salary of S$6,000.

Furthermore, there is no guideline on the ideal household debt servicing ratios for a particular country, noted UOB economist Francis Tan. He added that borrowers here have high savings rate compared to other nations and the unemployment rate is also low.

“As long as there is no sudden spike in interest rates – and the hike is expected to be very gentle — most people should be able to continue servicing their loans,” he said.

The MAS report also added that the general public could have difficulties in comprehending the Consumer Price Index (CPI) released by the Department of Statistics. Hence, it urges the Ministry of Trade and Industry to publish an illustration of what the figures mean in dollar terms.

“Such an illustration would help the public to better understand their expenditure patterns and the impact of the CPI changes on household expenses,” added MAS.

Nikki De Guzman, Junior Journalist at PropertyGuru, wrote this story. To contact her about this or other stories email

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