THE reverse mortgage scheme for HDB flats will take some time to win acceptance, because many Singaporeans still believe in leaving their flats to their children when they die, said HDB chief Tay Kim Poh this week.
Insurer NTUC Income, the only company offering reverse mortgages for HDB flats now, reports that only 10 people have been offered loans under the scheme.
'Not too good' is how Mr Tay describes the response.
He added: 'From our observation, a lot of Singaporeans would like to bequeath their flat to their children, so the idea of putting their flat up for reverse mortgage to generate income doesn't come naturally to most households, unlike in Britain and the United States. 'So we do think that it would take a while for such a scheme to take off.'
In a typical reverse mortgage, an elderly person pledges his property for a sum of money, with which he buys an annuity that provides a regular monthly income.
The HDB gave the green light for it recently to help older flat owners earn an income from their properties.
Ms Melissa Yam, a senior manager at NTUC Income, said HDB flat owners who went for reverse mortgages took out loans of between $30,000 and $120,000.
The flat owners, who were between 62 and 83 years old, mortgaged mostly three- to five-room flats.
TAN HUI YEE
