Let banks decide on age cap for loan repayment

I applaud the Government for relaxing loan limit rules for anyone wanting to borrow money using their residential property as collateral (Borrowing money against property easier now for retirees; March 11).

The revised total debt servicing ratio (TDSR) no longer applies to the housing loan of a property where the loan-to-valuation ratio does not exceed 50 per cent. The new rules will give flexibility to retirees to monetise their properties in their retirement years.

The housing loan is a long-term financial commitment which requires monthly loan repayments.

Currently, banks stipulate that a loan has to be fully paid back before one reaches 75 years old.

The banks say this is a rule set by the Monetary Authority of Singapore.

The stipulated age limit of 75 for the full repayment of loans will hinder some retirees in monetising their properties.

In order for the revised rules to benefit as many retirees as possible, I hope the MAS can give banks the flexibility to decide on the age limit for full repayment of loans on a case-by-case basis, for loans which are not under the TDSR framework.

Ong Khin Oon

A version of this article appeared in the print edition of The Straits Times on March 20, 2017, with the headline 'Let banks decide on age cap for loan repayment'. Print Edition | Subscribe