Mortgage default rates in Singapore have declined significantly in the last two years, attributed to the low interest rates and improving property market that helped borrowers repay their mortgages.
According to figures released by information firm DP Credit Bureau, the average rate of default mortgages of borrowers hit 0.43 percent in March, down from 0.59 percent in March 2009 and 0.89 percent in March 2008, when the Singapore economy began to decline.
“The numbers represent an improvement in the property market leading to more positive sentiment,” said Mr. Lincoln Teo, general manager of DP Credit Bureau. “This indirectly drives better payment behaviour from mortgagors.”
He noted that the better payment situation in the country comes amid greater efforts from consumers to improve and maintain their credit worthiness, realising its importance for securing future debts.
The study also showed that younger borrowers are getting better at meeting their mortgage obligations compared with middle-aged Singaporeans. People aged 50 to 59 have the highest percentage of mortgage arrears, with 0.62 percent in default, while mortgage defaults of younger individuals aged 21 to 29 dropped to 0.42 percent this year from 2.2 percent last year.