REVERSE MORTGAGE SCHEME

REVERSE MORTGAGE SCHEME: **

(Figures): **

2.

Ms Irene Ng Phek Hoong asked the Minister for National Development if he will provide an update on the reverse mortgage scheme, in particular (i) how many financial institutions are offering this scheme; (ii) how many residents have taken up this scheme; and (iii) what is the average amount that residents receive under this scheme every month.

Mr Mah Bow Tan: Reverse mortgage is one of the options available to elderly HDB flat owners who wish to monetise their flats. To date, NTUC Income is the only financial institution offering a reverse mortgage scheme for HDB flat owners.

Between its introduction in March 2006 and end of 2006, NTUC Income approved 12 applications for the reverse mortgage scheme.

The typical monthly payout from a reverse mortgage is $141 for a 3-room flat, $208 for a 4-room flat and $274 for a 5-room flat based on a loan tenure of 28 years, ie, from age 62 to 90. NTUC Income has determined these payouts based on its evaluation of the costs and financial risks involved.

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