UOB is reported to be offering a 50 year home loan. Although I do not think that all of us qualify for this. But this is truly something that is astonishing. They are introducing this product because? People are asking for it. This loan applies for HDB as well as private residential as well. Of course, you can’t be 50 years old when you are applying for such a long repayment period.
There are already loans that span 40 years (OCBC and HSBC have this), but I think it would mean that you could be servicing the loan until your twilight years (or before you kick the bucket), yeah sure, you can still continue to service the loan if you still have the ability to generate the same level of income. The million dollar question always has to be “What if…”
This to me is worrying, not because UOB is offering, but there are seriously people who will entertain the thought of such a long loan repayment period. It makes sense now because of the low interest rate environment, but this situation will not be so through out the entire 50 year span. But very often we know this fact, but we tend to only see the short term.
Better financial planning, and education is necessary to prepare those who undertake such long term loans. I hope the banks would see to that to ensure that we do not end up with a social issue.
I always think that before making a major commitment like buying a property, you need to seek out sound financial advice not just from the bank, but also your financial planning or wealth planning advisor. So if you do not have such a person to guide you in growing your money, you should seek one out today, because finding one that you can trust with all your confidential details about your money is not that easy to find.
This message is NOT brought to you by UOB, or by any branch of UOB for promoting their 50 year home loan package. I am also not promoting any specific bank in particular, or endorsing any specific financial institution.