The finances of households in Singapore are generally in good shape that even those who over-borrowed are unlikely to default on their loans even if interest rates rise, said Lawrence Wong, a director on the board of the Monetary Authority of Singapore (MAS).
In Parliament yesterday, Wong reiterated that only five to 10 percent of mortgage borrowers in the country have a Total Debt Servicing Ratio (TDSR) of more than 60 percent of their monthly income.
“Most of these borrowers have above-average income levels. The majority took up private housing loans and are only servicing one housing loan, so they are likely to have a larger absolute buffer in income and assets,” he said in response to a query from Nominated MP Laurence Lien.
Wong added that Singaporean households are generally in good financial shape, with the country's debt-to- income ratio declining in the second half of the last decade.
He noted that the debt-to-income ratio of 2.1 times in 2013 is “significantly lower” compared to the 2.6 times seen during the middle of the last decade. This means that Singaporean households were more overstretched back then than they are now.
Nikki De Guzman, Junior Journalist at PropertyGuru, edited this story. To contact her about this or other stories email firstname.lastname@example.org