Support Site for The Unemployed & Underemployed
Wednesday June 20th 2018

Comment: Is renting better than having a huge HDB mortgage loan saddled round your neck?


I read with great interests on your interview article. I find that no matter where we are, it is good to save money for raining days. In the event if we are unemployed, it could help us financially before getting a new job. I know that most Singaporeans love to have a little house to be called as our home. HDB is part of the Government housing ownership to enable most of us to own a flat when we cannot afford a private property. And 99-year leasehold is a long period of time to know what lies ahead for our HDB flat. Our flats are going to ashes if it hits the end of the 99-years lease and home owners would not be allowed to extend it. Anyway, we all know that government flats are not our flats. Therefore, we can never be allowed to use our HDB flat as a pledge.

Maybe we should not be investing in an HDB flat? It is better to rent a place than to buy an HDB flat, so we will not be having hefty 6-figure mortgage loan. The writer mentioned that most of us wanted the best for our family and a big HDB flat is a reasonable reward for the hard work we have put in for ourselves. In a way, it is correct. But do we want to feel stressful with outstanding loan not paid to the bank and when we are suddenly retrenched? Is chasing a Singaporean dream so important or losing our home due to prolong non-payment of mortgages?

Unless we can afford to buy a private condo. If you rent an HDB flat, your 20-30 years of CPF funds for serving the HDB flat loan will be left untouched and upon retirement, these sums will be enormous due to compound interests.

There is a talk of downgrading for Philip to permanently ease the pain, but I sense a reluctance there as it may mean not only a loss of space over brick and mortar but also the esteem issue as there is a potent loss of esteem and prestige which probably may be more damaging for the 50-something baby boomer.

Many couples in developed countries are mainly renting to stay. They could not afford to even pay the down payments in order to get a housing loan as housing prices are very expensive. It is just a matter of choice for us. Do you prefer to be in depression stress or live your life just to show others? It’ll be difficult to sell your HDB flat when the remaining leasehold is less than 55 years. No banks will provide you a housing loan. Unless you can provide huge cash, payment and borrow less from the banks. If I have so much cash, I will buy a private property.

We all know what will happened once we hit 45 and suddenly becomes jobless. Chances are, you will be hit by a huge strong black wall of difficulties in order to get re-employed. These problems usually occur in most of the developed countries. We can no longer be staying in a comfort zone to relax once we have a family, a car, a flat or going for annual holidays with family members. These are all in the past. We are now considered a developed country with matured economy. So, we must now learn to make changes to our careers or whatever. There are no more promises of remaining employed with the same employee for a life time. Or the government can keep you well if you voted for them.

We are on our own now.

Jia Ming

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3 Responses to “Comment: Is renting better than having a huge HDB mortgage loan saddled round your neck?”

  1. Swee Yong says:

    Well written concerns. For the majority of home buyers who need to take 60-80% loans, renting could be a much better option.
    Consider these numbers… stamp duty alone could be equivalent to a year of rental.

  2. xyz says:

    Singapore is 1 of those rare cities where it’s usually more expensive to rent than to mortgage. Most other countries, including US, Canada, UK, Oz, have mortgage rates at least 4+% to 6%.

    A basic 3-rm or 4-rm BTO in non-mature estate is still the most economical method to get your own place in S’pore. You must understand that HDB is different from private condo 99yr lease. Hence you need to treat HDB as longterm rental.

    The only thing is that you lose flexibility in terms of work-home distance & you may end up having to spend 2+ hours daily just on commute using the increasingly unreliable public transport.

    Foreigners renting main advantage is ability to easily move near to where the jobs are.

  3. Matt says:

    After reading these articles here regarding buying or not HDB…my careful assessment is don’t buy…WHY? in the end of 99years all the funds that you have are gone…left with minimum sum and how long is that going to last…hopefully by then we are still in good health.
    Having said this…its a chicken and egg thing again…then where would one stay or have a place?
    Home ownership is now a big question to be debated.

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