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Housing loan rules to change, remaining lease on property should last until buyer is 95

Singaporeans are living longer.

Sulaiman Daud | May 9, 05:00 pm

Singaporeans are living longer, and the Housing & Development Board (HDB) has taken notice.

From May 10, 2019, those looking to buy an HDB flat will enjoy the full benefit of a housing loan only if the flat purchased will last them until the age of 95.

Buyers who don’t meet this criteria can still take up a housing loan, but the amount will be pro-rated.

Majority of home buyers unaffected

This change was announced on May 9, in a joint statement released by the Ministry of National Development and the Ministry of Manpower.

According to the ministries, the majority of home buyers will not be affected, since they will already purchase a property that lasts them until the age of 95.

The changes are to reflect the higher life expectancy of Singaporeans today.

How it works now

Currently, HDB housing loan rules look at the remaining lease of the property being purchased.

How loan is extended

If the flat has at least 60 years remaining on its lease, and if the buyer meets the other criteria, then he or she will qualify for a HDB loan of up to 90 percent of the Loan-to-Value (LTV) limit.

If the property has less than 60 years remaining on the lease, then the buyer can still get a HDB loan of up to 90 percent of the LTV limit, as long as:

  • The property covers the buyer until the age of 80.
  • The length of lease is at least 20 years.

How it will work

But with the new rules, the criteria has changed.

The updated HDB loan rules now focus on lease coverage for the buyer.

The flat being bought needs to cover the age of the youngest buyer until the age of 95.

Let’s say the buyer is 40 years old, then the flat needs to have a lease of 55 years.

But if the buyer is purchasing the flat together with a 30-year-old partner, then the lease on the flat needs to have 65 years left.

Once this criteria is met, the HDB loan of up to a LTV limit of 90 percent will be extended.

A buyer can still get a HDB loan if he or she doesn’t meet the age requirement, although it will be pro-rated from 90 percent.

But if the property has a lease of 20 years remaining or less, then you don’t get a loan at all.

Related story:

Hong Kongers bemoan city’s housing problems, praise S’pore’s public housing

Top image from HDB’s Facebook page.

About Sulaiman Daud

Sulaiman believes that we can be heroes, if just for one day. His favourite Doctor is Peter Capaldi's Twelve, and he lives according to the teachings of Jürgen Klopp. He also writes about film and pop-culture, which you are very welcome to read here.

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