Written Answer by Ministry of National Development on home owners taking third housing loan from HDB
Jan 20, 2015
Mr Zainal Sapari: To ask the Minister for National Development:-
(a) what is the rationale for imposing a higher interest rate for home owners who take a third housing loan from HDB;
(b) what is the income profile and circumstances in which a person will be granted a third HDB housing loan; and
(c) whether the interest rate can be equalised regardless of the number of housing loans taken.
Answer:
HDB provides up to two concessionary rate loans to eligible flat buyers, with interest rate at below market rates over the long term. Under exceptional circumstances, HDB may grant a third housing loan but it will then be at the market rate. Typically, this is for those who are in urgent need of housing, but due to poor credit records, are unable to secure a bank loan even though they have a steady income.
Providing a third housing loan at a higher rate is to discourage churning of resale flats. However, for genuine hardship cases, HDB may help with a concessionary rate loan, if the case merits such consideration.