Written Answer by Ministry of National Development on mortgage service ratios of HDB housing loans

Oct 7, 2019

Mr Leon Perera: To ask the Minister for National Development in each of the last five years (a) What has been the mean and median mortgage service ratio (MSR) for those servicing mortgage loans for only a single HDB flat; and (b) How many HDB lessees have been allowed to exceed the MSR ceiling, if any.

Answer:

Between 2014 and 2018, the mean and median mortgage service ratios (MSRs) of HDB housing loans disbursed at key collection were similar – these ratios have been stable at around 20% for new flat purchases, and 25% for resale flat purchases. As flat buyers are required to dispose of any existing property after they collect the keys to their flat, they will be servicing an HDB housing loan for a single flat.

The Mortgage Servicing Ratio (MSR) cap of 30% of flat buyers’ income is one of the criteria used to determine the maximum loan amount that flat buyers are eligible for when they apply for a housing loan to purchase an HDB flat or executive condominium.  However, some flat buyers choose to shorten their loan tenure to minimise interest costs.  For a small number of such flat buyers (around 3% of those who collected keys to their HDB flats in 2018), while their approved loan amount adheres to the MSR cap over the maximum applicable loan tenure, their mortgage instalment over the shortened loan tenure may exceed 30% of their monthly income.