New housing loan scheme could lure buyers to get larger loans: analysts
They could benefit from the stable interest over time.
The new rule where buyers could opt to retain up to $20,000 in their Central Provident Fund (CPF) Ordinary Account (OA) when taking housing loans could lure buyers to take larger loans amidst higher loan to value (LTV) limits and stable interest rate, ERA Realty key executive officer Eugene Lim said.
In addition, the new scheme by the Housing and Development Board could be helpful for those who are retrenched or are in transition between jobs without monthly CPF, PropNex Realty CEO Ismail Gafoor commented.
“This way, the surplus in their [buyers] account allows them to sustain their upcoming installments in the next few months, Gafoor noted.
HDB noted that the new option will be available to flat buyers who have yet to collect the keys to their new flats and those who have received resale applications. Meanwhile, those who intend to use all their CPF OA balances for their flat purchase may continue to do so.
“The funds can be used for their monthly mortgage installments in times of need and will improve retirement adequacy if left unutilised,” HDB noted.
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