The people’s bank of Singapore did it again.
HOME owners with mortgages at DBS Bank can ease some of their financial burden by opting to pay only the interest on their loans for periods of up to 18 months.
The bank sees the scheme as a way of helping cash-strapped borrowers who are worried about their ability to repay their mortgages amid the deepening economic gloom.
The scheme could potentially benefit ‘tens of thousands’ of borrowers with home loans at DBS.
It can mean an immediate reduction in the monthly amount a borrower must fork out as a key portion of the payment – the loan principal – can be set aside.
Take a 25-year home loan of $500,000 pegged at an interest rate of 3.5 per cent.
A borrower will have to pay $2,504 a month – covering both interest and principal.
But by opting to pay the interest only, his monthly payment drops to $1,439, putting an extra $1,065 into his pocket.
So even if a working couple loses one income, which is a growing threat in the downturn, they can likely keep paying their mortgage – and keep their home.
… Source: The Straits Times
According to the article, other local banks are open with the idea of talking to them as well should you have any problems servicing your loan. The last thing that banks want to do is to take back your property to foreclose. So contact your bank if you have any problems and be honest with them.