Banks approve 90% of applications to defer mortgage payments

Banks have approved about nine in 10 applications by property buyers to defer mortgage payments.

They have also approved more than 90 per cent of applications submitted by small and medium-sized enterprises (SMEs) to defer payments on secured loans.

These deferments are part of baseline relief measures the Monetary Authority of Singapore (MAS) had introduced to help residents and companies hit by the economic fallout from the Covid-19 crisis.

MAS board member Ong Ye Kung, in announcing the figures in Parliament yesterday, said the central bank "has been working with the financial industry to help individuals and SMEs with a wide range of credit relief measures, without these impacting the borrower's credit record".

In all, there were 31,300 such applications from property buyers and 3,300 applications from SMEs as of May 10, he added.

MAS has also worked with financial institutions and industry associations to promote awareness of the relief measures, and to help borrowers understand the costs and benefits of each relief measure so that they can make informed decisions, added Mr Ong, who is also the Education Minister.

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Mr Ong was responding to Mr Henry Kwek (Nee Soon GRC), who had asked whether MAS would consider proactive measures to help individuals and businesses understand credit restructuring and credit counselling programmes, as many face financial woes because of the pandemic.

Mr Kwek also wanted to know if the central bank would proactively monitor banks' housing loan rates to ensure reductions are timely and fair, given that interest rates are declining rapidly.

Mr Ong was responding on behalf of Senior Minister Tharman Shanmugaratnam, who is the Minister in charge of the central bank. He said MAS does not intervene directly in housing loan pricing as interest rates are determined by the market.

"But (the central bank) expects housing loan interest rates to be revised downwards in a fair manner, where this is consistent with sustained trends in banks' cost of funding for such loans," Mr Ong said.