Guidelines out on deferment of secured loan, mortgage payments

Mortgage Payment

Retail & Commercial customers will be able to defer their mortgage repayment for the rest of the year and convert their outstanding credit to a loan of up to five years.

It is the third round of liquidity relief measures during the Covid-19 outbreak, going beyond the guidelines set out by the Monetary Authority of Singapore (MAS) to reduce the burden on borrowers earlier this week.

The deferment of home loan principals and interest payments until December will have no impact on individuals' records, and that no late payment interest will be charged.

If you need to defer your mortgage repayments, here are the links 

 

UOB

https://forms.uob.com.sg/personal/property/cashflow-assist.html

OCBC

https://www.ocbc.com/group/covid19-support/assets/pdf/ocbc-mortgage-payment-deferment-scheme.pdf?2020040202

DBS

https://www.dbs.com.sg/Contact/dbs/homeloans/cashflow-relief/default.page?pid=sg-dbs-pweb-others-goodwill-efforts-btnapplynow-cashflow-relief

Maybank

https://www.maybank2u.com.sg/iwov-resources/sg/pdf/loans/appform-maybank-homeloan-repayment-relief.pdf

Standard Chartered Bank

https://www.sc.com/sg/important-information/covid-relief-mortgage/

If you have any other enquires, feel free to contact Towkay@Smart-Towkay.Com. We will do our best to fact find for you or any burning questions you have, or leave a comment below and we'll get back to you ASAP.

FREQUENTLY ASKED QUESTIONS ON REPAYMENT DEFERMENT FOR RESIDENTIAL PROPERTY LOANS FOR INDIVIDUALS  
Relief for Mortgages1
S/N Questions Answers
1. What is this relief measure that banks and finance companies are offering for residential mortgages? This relief measure forms part of the relief package that MAS, in collaboration with the financial industry, has put forth to help individuals affected by the COVID-19 pandemic.   This initiative offered by banks and finance companies is intended to help borrowers facing difficulties meeting repayments under their existing mortgage loans, by allowing them to defer repayment of the principal or both principal and interest up to 31 Dec 2020.
2. How can a mortgage repayment deferment help me? If you are facing cash flow constraints and have difficulties repaying your residential mortgage during this difficult period, you can consider applying to your bank or finance company for a mortgage repayment deferment to lower your monthly debt payments up to 31 Dec 2020. Regular mortgage instalments will resume after the deferment period.
3. What are the features of a mortgage           repayment deferment?

You can choose to defer up to 31 Dec 2020, either:

· the principal portion of the monthly instalment, while continuing to pay the monthly interest; or

· the full monthly instalment. Interest will continue to accrue on the principal amount deferred, but no interest-on-interest will be charged during this deferment period. After the deferment period, the loan amount and interest accrued on the deferred principal will be fully amortised over the remaining loan tenure.  

You can also choose to extend the tenure of your mortgage by the duration of the deferment period, to lower the monthly instalment amount following resumption of regular payments.   However, you should keep in mind that deferring payments and extending your tenure mean that you will be paying more interest in total.

Therefore, it is better not to defer repayments if you do not need to. Before applying for the deferment, we encourage you to discuss with your bank or finance company on your options and in the case of a deferment, how the payment schedule and increased interest cost will be like.

   

Illustrative Example For a mortgage with $200,000 outstanding and a remaining tenure of 20 years, and assuming a 2% interest rate, the extra interest cost over the remaining tenure will be about -

· $1,300 for a principal-only deferment period for 9 months, and $2,930 if the tenure is also extended by 9 months.

· $1,920  for  a  principal  and  interest  deferment  period  for 9 months, and $3,570 if the tenure is also extended by 9 months.

4. Why is the interest on my principal amount not waived during the deferment period? This is a special relief that banks and finance companies have collectively agreed to, and introduced, to help individuals who are facing cash flow difficulties with their mortgage repayments during this COVID-19 period.   Interest would accrue as the banks and finance companies continue to bear the risks of lending. However, if you choose to defer the full monthly instalment, interest-on-interest will be waived during the deferment period.
5. Can I defer only part of my principal repayment, i.e. make lower monthly repayment that pays down both principal and interest? You may approach your bank or finance company to discuss the option of deferring only a part of the principal repayment.
6.

Will my mortgage

automatically get a repayment deferment?

No. Repayment deferments are not automatic as individuals will incur higher total interest costs and not all individuals need it. If you need a mortgage repayment deferment, you would have to apply to your bank or finance company. It will process your application expeditiously upon receipt.
7. How do I know if I am eligible for a repayment deferment?   If I am currently on a Debt Reduction Plan (DRP) for my mortgage, can my repayments under the DRP be deferred too? You are eligible if you have a residential mortgage, whether it is a housing loan or a mortgage equity withdrawal loan, and your monthly instalments are not more than 90 days past due as at 6 Apr 2020.   Repayments under your Debt Reduction Plan that is taken in connection with your residential mortgage can be similarly deferred.
8. Can I get a repayment deferment                           for my commercial or industrial property loan? If you are facing difficulties repaying your non-residential property loan, you should approach your lender early to discuss suitable repayment plans or debt restructuring. If you are operating a business, you may refer to the announced relief measures for SMEs.
9. Can I get a repayment deferment for my overseas residential property loan? If you are facing difficulties repaying your overseas property loan (including residential, commercial and industrial properties), you should approach your lender early to discuss suitable repayment plans or debt restructuring.
10. My mortgage is more than 90 days  past  due  as  at  6  Apr 2020. Can my bank or finance company still help? You should approach your lender early to discuss suitable repayment plans or debt restructuring.

 

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