EVALUATION OF RESIDENTIAL FINANCIAL SCHEMES IN SINGAPORE

Abstract

With the liberalization of the financial market in Singapore, local banks now have to compete intensely with foreign and often larger banks for the residential mortgage markets. To succeed, banks need to understand the features of the loan and mortgagee that borrowers think are important to them. We studied the varieties of mortgage loans available here and their features. We then surveyed people who were looking for a loan or had obtained one in order to determine what features were important to them. The first three most important features are all associated with the ability of repayment of the loan. Interest rate was ranked first. The maximum years of repayment was ranked second and flexibility of repayment third. Features associated with the mortgagee were ranked lower. We compared the varieties of mortgage loans available with the features ranked and conclude that the banks have attempted to meet these features. More could be done to introduce other types of loans for the variety of borrowers and financial needs.