Many not aware of HDB loan cap but are OK with it

Many not aware of HDB loan cap but are OK with it

SINGAPORE - Pharmacist Michelle Ho and her fiance are planning to get a Housing Board flat but did not realise, until recently, that there is a cap on the number of years for which a home loan from HDB can be serviced.

Still, the 28-year-old said that this does not affect her as she and her fiance have already set their sights on a shorter loan tenure, involving them "forking out less eventually, in terms of interest".

Like Miss Ho, many young Singaporeans are not aware of the cap on the repayment period for HDB loans, but said it was not a problem as they prefer shorter loan periods.

This issue came to light after news broke last Friday that home loans from financial institutions, such as banks, will be restricted to a maximum tenure of 35 years.

Previously, home loans could have longer tenures, such as the 50-year home loan UOB introduced in August.

The latest rules apply only to new residential-property loans, and cover loans from financial institutions for both public and private homes. They are also separate from those governing HDB loans for public flats.

But the new rules for financial- institution home loans do share similarities with loans offered by the HDB, in terms of the repayment period.

The maximum repayment period for a HDB loan is 65 years minus the buyer's age, or 30 years, whichever is shorter.

Also unaware of the maximum repayment period for HDB loans were procurement executive Joycelyn Toh, 21, and her cook boyfriend Chang Chon Yee, 22.

Despite the cap, they said that they will still consider applying for a flat later as "having a substantial amount of savings is a priority", said Ms Toh.

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