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The Housing and Development Board’s (HDB) concessionary loan is designed to assist the lower-income group afford a HDB flat.
Its interest rate is expected to be lower than those for bank loans, which are designed to make a profit mainly from the higher-income group, whose members do not qualify for the HDB’s housing loans.
Ironically, banks have been offering lower interest rates for the past few years and even guarantee to charge a rate below 2.6 per cent.
For example, the POSB HDB Loan rate is 1.88 per cent per annum, with a cap of 2.5 per cent for at least eight years.
The HDB concessionary rate should be lower, considering the responsibility of providing a more affordable housing loan for the low income.
This letter was written by Wong Boon Hong.
