Mortgage Payments Affected by CPF Minimum Sum Requirement

Mr Zainal Sapari asked the Minister for National Development (a) what is the current number of cases where HDB owners are in mortgage arrears because of having to fulfil the CPF Minimum Sum when they reach the age of 55; and (b) what options are available to them if they have difficulties paying their monthly mortgage payments.

Mr Khaw Boon Wan: There are about 1,250 HDB flat lessees who are aged 55 and above and are in mortgage arrears of three months or more. Most of them fall into mortgage arrears primarily because of low income or prolonged unemployment.

It is unlikely that these lessees have fallen into arrears because of the CPF Minimum Sum (MS) requirement, as they can use the amount in their Retirement Accounts (in excess of the Minimum Sum Cash Component) to pay for their housing loan. Those who are still working can also continue to use their monthly Ordinary Account contributions to service their housing loan without first having to top up their MS.

Page: 644

HDB has a proactive programme to help its lessees manage their mortgage arrears. If their financial problems are temporary, HDB will consider reducing or deferring their mortgage installments, or working out an installment plan. If necessary, they will also refer them to the Community Development Councils to help them get employment, financial aid or other social support.

For flat owners who can no longer afford to keep their flats, HDB will help them explore long-term solutions. For example, they can include their children to help them pay for the housing loan. They can also consider moving to a smaller flat. If necessary, HDB can offer them another loan to buy a smaller flat.