Close to S$15b of Singapore mortgages under debt moratorium

Close to S$15b of Singapore mortgages under debt moratorium

Close to 10% of Singapore mortgages, or over S$15b, under debt moratorium

THE 3 local banks in Singapore are estimated to have granted payment deferments to more than S$15 billion worth of mortgages as at the end of June this year.

All in, the total value of deferred mortgages in Singapore make up almost 10% of all outstanding mortgages.

This comes as the S$15-billion worth of deferred mortgages account for nearly 80% of approved mortgage debt relief applications, a Monetary Authority of Singapore (MAS) spokesperson told The Business Times in response to queries.

During its annual-report briefing, MAS had told the media on July 16 that in total, more than 34,000 mortgages here are undergoing a deferment of principal or interest payments, or both.

Compared against the estimated outstanding home loans of nearly S$200 billion as at May 2020, the estimated total deferments in mortgages is just under 10% of all outstanding mortgages. Based on earlier estimates from private economists, the total number of mortgages that are being deferred would translate to at least 4% of households that still have outstanding home loans.

Lenders here will approve the request for deferment as long as the individual borrower is not in arrears for more than 90 days as at April 6. Individuals do not need to show any impact from Covid-19 to secure the deferment.

MAS also told BT that the total value of secured loans that have been deferred by small and medium-sized enterprises (SMEs) here was more than S$11.4 billion as at June 30.

At the MAS annual-report briefing, the central bank said more than 5,300 secured loans held by SMEs have deferred on principal payments, as allowed under relief measures streamlined by the authority.

The dollar-value of these deferment secured loans at more than S$11.4 billion as at end-June is roughly 25-30% of more than S$40 billion in secured loans currently taken by SMEs that MAS estimated in March could qualify for debt moratoria.

The MAS also said at its annual-report briefing that it is studying when and how to ease virus relief measures, to mitigate unintended “cliff” effects when these helplines expire towards the end of the year. With deferred payments meant as temporary relief and that come with additional costs, MAS has flagged concern over debt accumulation in the system.


Source: Business Times (click here)

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