New DBS loan lets private property owners borrow against homes to fund retirement

TO help retirees make the most of their home equity, DBS is letting seniors in Singapore borrow against their fully paid private homes to supplement their retirement incomes.

Under its new home equity income loan scheme, Singaporeans and permanent residents aged 65 to 79 who own and reside in fully paid private properties will be able to take out loans to top up their Central Provident Fund (CPF) retirement sums, so as to raise the monthly payouts they receive under the CPF Life (Lifelong Income For The Elderly) scheme. CPF Life is a longevity insurance annuity scheme that provides a monthly payout for as long as its member lives.

In designing the scheme, DBS said it took reference from, among other data, working research from the Wharton Pension Research Council which found that an average homeowner above the age of 50 in Singapore holds some 60 per cent of their total net wealth in housing equity, suggesting potential demand for reverse mortgage loans.