Home loan repayment can now stretch to 50 years

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#1
Welcome to being in debt literally for life!

*For the full article, please visit the website.

The Straits Times
www.straitstimes.com
Published on Jul 20, 2012
Home loan repayment can now stretch to 50 years


By Yasmine Yahya

UNITED Overseas Bank (UOB) has introduced a home loan that spans half a century - likely the longest-term loan available here.

UOB introduced this longer loan duration as more customers have been requesting for such loans.

However, these loans come with conditions. 'This type of loan is applicable to private residential and HDB loans only,' said Ms Chia Siew Cheng, head of secured loans for UOB's personal financial services division. As well, borrowers above a certain age are not eligible, but UOB declined to say what the cut-off age is.

And if the property is leasehold, it needs to have at least 35 years left on the lease at the end of the 50-year loan.

Ms Chia noted that the loan has its pros and cons. Having a longer term 'will result in a smaller monthly loan instalment and will be easier on monthly cashflows. However a longer repayment period also means that more interest will be payable'.

Financial adviser Damian Pang warned that by taking on such a long-term loan, the homeowner will be servicing the loan long into his retirement years.

A quick check with other banks here found that the longest loan term was 40 years.

At OCBC, for example, the maximum loan period for private and HDB homes is 40 years, or up to the age of 75 years, whichever is earlier.

At HSBC, customers with at least $200,000 with the bank can get loans of up to 40 years. Others can receive loans of up to 35 years, at the most.

Even then, most customers opt for loans of just 30 years, said Mr Harmander Mahal, HSBC Singapore's head of customer value management. Only about 1 per cent of customers take up the 40-year loans.

Longer term loans require the borrower to pay a smaller sum each month. This gives consumers the confidence to purchase new homes, and could help to keep prices buoyant, said Mr Ku Swee Yong, the chief executive of International Property Advisor. 'It improves affordability, which means it is good for the housing market in general, not just developers.'
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My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#2
(20-07-2012, 02:58 PM)Musicwhiz Wrote: Welcome to being in debt literally for life!

*For the full article, please visit the website.

The Straits Times
www.straitstimes.com
Published on Jul 20, 2012
Home loan repayment can now stretch to 50 years

Wah... Properties just became more 'AFFORDABLE' ! Rolleyes
Luck & Fortune Favours those who are Prepared & Decisive when Opportunity Knocks
------------ 知己知彼 ,百战不殆 ;不知彼 ,不知己 ,每战必殆 ------------
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#3
IIRC, 100-year mortgage was introduced in Japan in 1990s.

a sign of property slump to happen in SG?
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#4
A 40 year old person with this 50 years loan, his child will likely needs to continue to service for him after his retirement or death.
How great a chance to service the loan later that is way above market valuation like cases seen in Japan.

Is this the last desperation to push property out to buyer ?

Just my Diary
corylogics.blogspot.com/


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#5
(20-07-2012, 03:40 PM)corydorus Wrote: A 40 year old person with this 50 years loan, his child will likely needs to continue to service for him after his retirement or death.
How great a chance to service the loan later that is way above market valuation like cases seen in Japan.

Is this the last desperation to push property out to buyer ?

If i read correctly, not everyone is granted with 50 years loan. One of the criteria is the age when loan mature, in this case max 75 years old. Few years ago, i was told max is 65 years old, Now it is extended to 10 more years

A 40 year old person is only granted with 35 years loan. Only 25 years person will be granted with 50 years loan.
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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#6
This 40,50 years housing mortgage is new era bondage. It is not much difference like Bondage of the past slavery age.TongueTongue
WB:-

1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.

Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.

NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
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#7
The difference is during the slavery age, slaves did not have a choice. In the new era, house buyers enter into the bondage on their own volition.
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#8
Yes! But in Sinkapore try renting a flat from HDB; i doubt any of you here can qualify . Renting from the market is just too much/expensive for most of us. So your choice is very limited.
WB:-

1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.

Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.

NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
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#9
Well, look on the bright side, at least Singapore banks are not offering "sub-prime" loans just yet. Tongue

50-Year loans are indeed worrisome, but just one bank (UOB) is doing so, and it's more of an anomaly than a prevalent practice. Still, the presence of 35 and 40-year loans is definitely a cause for concern! Dodgy
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#10
All this talk about making things affordable is total B.S.
You have 30yr leasehold 'affordable' factory space, you got cars that pay over 10 years, the maximum allowed on a usable life of a car.
Now you got 50yr housing loans. The point is not about whether a person qualifies for it or not,
it's about the direction in which we are heading. No one looks at the cost of the product anymore, they look at how much they need to fork out each month and this encourages reckless borrowing.

No one owns anything anymore, the bank owns everything.
And by the time you finish paying, it is probably near the end of its useful life or near end of your life.
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