MORE private home owners are not making their mortgage payments on time, figures from the Credit Bureau of Singapore show.
The number of borrowers with delinquent mortgages - accounts that have not been paid for more than 30 days - hit 4,186 in May, up 20 per cent from the 3,340 a year earlier, the Credit Bureau told The Straits Times.
Delinquent borrowers comprised 0.82 per cent of private home loans in May, up from 0.7 per cent in the same month last year.
But there was a much smaller increase in the number of mortgage defaults. Banks wrote off six mortgages in the first five months of the year, a touch up from the five bad loans over the same period last year.
The Credit Bureau does not decide on the status of a mortgage, it said, but banks typically consider accounts with payments that have been overdue for 90 days or more as a defaulted loan.
However, industry players noted that the decision to repossess a property varies among banks.
Although the percentage rise in the number of delinquent accounts was more than the increase in total private home loans, experts note that the figures are not yet alarming.
Mr Alvin Liew, senior economist at United Overseas Bank, said: "It's good to pay attention to the numbers, but it's too early to conclude that this is the start of a major problem."
Loan curbs, known as the Total Debt Servicing Ratio (TDSR), were introduced in June last year to stop home buyers from overstretching themselves.
Mr Liew noted that as the figures are cumulative, there could be highly leveraged individuals who took out large loans before the TDSR was introduced.
However, given the stricter loan curbs, the situation is expected to improve, said Mr Liew.
Another possible reason behind the increase in overdue payments could be the slight rise in the overall jobless rate, which increased from 1.8 per cent in December last year to 2 per cent in March.
Mr Song Seng Wun, regional economist at CIMB, pointed out that it could be a reflection of the correction in the property market.
The number of private condominium homes completing this year is expected to hit 17,000, up from 13,150 last year.
As tenants have more options amid a softening market, owners who bought units expecting to finance them with rental income could find themselves burdened instead, Mr Song said.
Moreover, mortgages are almost fully drawn down upon the completion of a new property, bumping up the monthly payments, he noted.
This underlines the increasing number of properties that were put up for auction by banks.
Earlier reports showed that 42 mortgagee sale properties went to auction in the second quarter, the highest since the third quarter of 2009, when 63 homes were up for a fire sale.
Repayment schemes can be worked out with the bank, said Mr Joseph Wong, head of consumer credit risk at OCBC Bank, but borrowers at risk should inform the bank as soon as possible as a sign of commitment to the loan.
"Some options could include lower repayments to meet a temporary change in their financial position," added Ms Lui Su Kian, managing director and head of deposits and secured lending at DBS Bank
The number of borrowers with delinquent mortgages - accounts that have not been paid for more than 30 days - hit 4,186 in May, up 20 per cent from the 3,340 a year earlier, the Credit Bureau told The Straits Times.
Delinquent borrowers comprised 0.82 per cent of private home loans in May, up from 0.7 per cent in the same month last year.
But there was a much smaller increase in the number of mortgage defaults. Banks wrote off six mortgages in the first five months of the year, a touch up from the five bad loans over the same period last year.
The Credit Bureau does not decide on the status of a mortgage, it said, but banks typically consider accounts with payments that have been overdue for 90 days or more as a defaulted loan.
However, industry players noted that the decision to repossess a property varies among banks.
Although the percentage rise in the number of delinquent accounts was more than the increase in total private home loans, experts note that the figures are not yet alarming.
Mr Alvin Liew, senior economist at United Overseas Bank, said: "It's good to pay attention to the numbers, but it's too early to conclude that this is the start of a major problem."
Loan curbs, known as the Total Debt Servicing Ratio (TDSR), were introduced in June last year to stop home buyers from overstretching themselves.
Mr Liew noted that as the figures are cumulative, there could be highly leveraged individuals who took out large loans before the TDSR was introduced.
However, given the stricter loan curbs, the situation is expected to improve, said Mr Liew.
Another possible reason behind the increase in overdue payments could be the slight rise in the overall jobless rate, which increased from 1.8 per cent in December last year to 2 per cent in March.
Mr Song Seng Wun, regional economist at CIMB, pointed out that it could be a reflection of the correction in the property market.
The number of private condominium homes completing this year is expected to hit 17,000, up from 13,150 last year.
As tenants have more options amid a softening market, owners who bought units expecting to finance them with rental income could find themselves burdened instead, Mr Song said.
Moreover, mortgages are almost fully drawn down upon the completion of a new property, bumping up the monthly payments, he noted.
This underlines the increasing number of properties that were put up for auction by banks.
Earlier reports showed that 42 mortgagee sale properties went to auction in the second quarter, the highest since the third quarter of 2009, when 63 homes were up for a fire sale.
Repayment schemes can be worked out with the bank, said Mr Joseph Wong, head of consumer credit risk at OCBC Bank, but borrowers at risk should inform the bank as soon as possible as a sign of commitment to the loan.
"Some options could include lower repayments to meet a temporary change in their financial position," added Ms Lui Su Kian, managing director and head of deposits and secured lending at DBS Bank
