A drop in household income and prolonged unemployment or illness are among the common reasons why Singapore households fall into mortgage arrears, revealed the Ministry of National Development.
Notably, out of the 405,000 households with outstanding Housing and Development Board (HDB) loans for the past three years, 7.9 percent or around 32,000 households were in mortgage arrears of three months or more.
“Of these 32,000 households, almost half are in the 41-55 age group (based on the age of the oldest owner). Another 38 percent are above 55, and the rest are in the 21-40 age bracket,” it said in a written answer to Parliament.
At end-2017, 57 percent of these households or around 18,200 were no longer in mortgage arrears of three months or more.
To help with their mortgage arrears, HDB provides financial counselling to households and refers them to agencies that offer employment, social and financial aid.
For those with temporary financial problems, HDB helps them by “reducing or deferring their mortgage installment payments to ease their cash flow”.
HDB also helps those with prolonged financial difficulty explore long-term solutions, such as including working adult children as joint owners to help pay with the mortgage installments or right-size to a flat that is within their means.
This article was edited by Keshia Faculin.