Abstract:In this paper we will discuss about the mortgage market in Singapore. We will describe the nature of the mortgage market. The Central Provident Fund plays an important role in the mortgage market of Singapore.
The Central Provident Fund (CPF) is a mandatory saving scheme which plays an important role in the mortgage market of Singapore. The home is mainly purchased through this scheme.
In 1995, the then ruling Colonial British government introduced this scheme first. After that the CPF has been successfully promoting the home ownership in Singapore. According to a survey made in 1999, almost 92% of the population owned a home.
The home ownership in Singapore is divided into segment: public home ownership, which mainly dominates with 81% of the total households, and private home ownership. The public home ownership comprises both the lower and upper middle classes.
Some banks are going to increase the mortgage lending. Borrowing for real estate purchase is allowed by the government.
The private housing group is less regulated and it is responsible for only 10% of the total homes in the country. But, the private housing stock increased significantly over the years.
The HDB public finance sector has an important role in the Singapore mortgage market. It helps the HDB flat owners who will get subsidized loan rates legally. The HDB also offers subsidized loan to the first time buyers.
In Singapore many banks offer a low mortgage rates. These are: Hong Leong, United Overseas Bank Group, HSBC, NTUC, Singapore Finance, DBS to name a few.