IN THE letter, 'Cut interest rate for HDB loans' (my paper, Feb 3), Mr Chow Weng Ying asked if the Housing Board could cut the interest rate for HDB loans.

Eligible citizen families are given a subsidised loan by HDB to help them finance the purchase of their flat.

Our current concessionary interest rate is 2.60 per cent per annum, which is 0.1 per cent above the prevailing CPF interest rate.

It is reviewed quarterly, in line with the CPF interest rate. HDB also offers loans atmarket rate on a case-by-case basis to buyers who are not eligible for concessionary-rate loans but face difficulties in obtaining a bank loan.

The HDB market interest rate is the rolling average of the non-promotional long-term HDB housing-loan rates of the three local banks, DBS (POSB), OCBC and UOB. This rate is reviewed monthly.

The current market interest rate as of Jan 15 is 3.82 per cent per annum. Flat owners are advised to approach HDB early for assistance if they face financial difficulties.

As announced by the Minister for National Development recently, HDB will assist such households accordingly, including providing another loan to help them to downgrade to a more affordable flat if necessary.

Ms Yap Chung Lee
Deputy Director
(Housing Finance)
Housing & Development Board

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