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Home equity income loan
10 Jan 2022 (673 views)  

Someone asked me about "reverse mortgage". He has a fully paid property and wish to use it to provide an monthly income to meet his living expenses (and for his spouse) for the rest of their life. 

I checked with DBS bank. They provide details of their home equity income loan. See this page.

They will allow the owner to take a loan on the mortgage of their property. The loan is to be used to top up the life annuity payable under CPF Life. The top up can be done separately for both spouses. 

The loan can be taken for up to 30 years at a fixed income rate of 2.88% (note - this is an indicative interest rate. However, it will be fixed at the start of the loan). This allows the owners to stay in their house for the loan period. 

If the owner does not intend to stay in the house for the rest of their life, they can take a shorter loan period. This allows them to sell the house and repay the loan. At that time, they can rent a house or apartment to stay in.

This arrangement appears to be quite attractive and suitable. 

I believe that other banks would probably offer a similar scheme. The owners can get quotations from other banks and choose the loan that offers the lowest cost or the most suitable terms. 

Tan Kin Lian



 


Home equity income loan
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Someone asked me about "reverse mortgage". He has a fully paid property and wish to use it to provide an monthly income to meet his living expenses (and for his spouse) for the rest of their life. 

I checked with DBS bank. They provide details of their home equity income loan. See this page.

They will allow the owner to take a loan on the mortgage of their property. The loan is to be used to top up the life annuity payable under CPF Life. The top up can be done separately for both spouses. 

The loan can be taken for up to 30 years at a fixed income rate of 2.88% (note - this is an indicative interest rate. However, it will be fixed at the start of the loan). This allows the owners to stay in their house for the loan period. 

If the owner does not intend to stay in the house for the rest of their life, they can take a shorter loan period. This allows them to sell the house and repay the loan. At that time, they can rent a house or apartment to stay in.

This arrangement appears to be quite attractive and suitable. 

I believe that other banks would probably offer a similar scheme. The owners can get quotations from other banks and choose the loan that offers the lowest cost or the most suitable terms. 

Tan Kin Lian