Retrenchments are rising. The Ministry of Manpower counted 4,260 in the second quarter of 2026, the most in a quarter since late 2020. So the question in MAS's latest Financial Stability Review is a fair one for anyone with a home loan: if the income stops, can the instalments still be paid?
For most households, MAS's answer is yes. For about 1 in 100 households with a home loan, it is no. Here is what the stress test found, what it means in dollars on a real loan, and what to do first if it happens to you.
What MAS tested
MAS ran a scenario harsher than today: household income down 10 per cent, mortgage rates up 2 percentage points, and higher unemployment. Under it, about 1 per cent of households with a home loan would run a negative cash flow, spending more each month than comes in, and would not have six months of savings to fall back on.
MAS describes those households as mostly middle-aged HDB owners on relatively lower incomes, with a smaller group of middle-income borrowers carrying large private-property loans.
The wider picture is sturdier. Household liquid assets, such as cash and deposits, were about $714 billion in mid-2026, against $423 billion of household debt. Ten years earlier the figures were $381 billion and $320 billion. Debt has grown slightly faster than income in the past year, with household debt at 1.08 times disposable income, but that is still below its ten-year average.
What 2 percentage points does to an instalment
Today's cheapest home loan packages start at about 1.4 per cent, as our fixed or floating rate check found. Add MAS's 2 points and a 25-year loan's instalment rises by about a quarter:
$400,000 loan: $1,581 a month becomes $1,981.
$600,000 loan: $2,372 a month becomes $2,972.
$900,000 loan: $3,557 a month becomes $4,457.
That is roughly $100 more a month for every $100,000 borrowed. It is also a useful way to size a buffer: six months of instalments at the higher rate is about $17,800 on a $600,000 loan. We explained how rate moves reach Singapore borrowers in what a Fed rate rise means for your mortgage, and Roov's mortgage rates page shows today's packages.
If you are paying with CPF, count the months
Many owners pay their instalment entirely from their CPF Ordinary Account and never touch cash. After a retrenchment the contributions stop, but the deductions do not. Divide your OA balance by your monthly instalment: that is how many months CPF alone will carry the loan. After that, the instalment has to come from cash.
It is worth checking now, while you are employed. Someone with $25,000 in their OA and a $2,400 instalment has about ten months.
The first things to do
Tell the lender early, before a payment is missed. HDB has help for flat owners in financial difficulty, such as a temporary cut in instalments or a longer repayment period, and banks can restructure a loan. Both are far more flexible before arrears build up than after.
Keep paying, even partly. Missed payments bring late charges and a record with the credit bureau, and prolonged arrears can end with the bank taking the home and selling it. Mortgagee sales are already at a six-year high.
Do not borrow to pay the mortgage. A personal loan or credit card at many times the mortgage rate turns a short gap into a long problem.
Check your support. SkillsFuture Jobseeker Support pays eligible Singaporeans who lose their jobs involuntarily up to $6,000 over six months while they look for work, subject to income and home-value limits.
If the numbers do not work, decide early. Selling on your own timetable almost always beats a forced sale. Stay, sell or restructure weighs the options, the HDB sale proceeds calculator shows what a sale would return in cash and CPF, and rightsizing covers what a smaller home releases.
Before it happens
Hold six months of instalments in cash, at the higher-rate figure rather than today's.
Borrow below your limit, not at it. Banks size loans at a stress rate for a reason; our guide to how much you can borrow explains how, and the affordability calculator shows your own numbers.
Refinance while you are employed. A lower rate is easier to lock in with a payslip, and every $100,000 is about $100 a month at stake. Our home loan rates guide covers when it pays to switch.
Waiting for rates to fall is not a plan either: it won't raise your budget.
Worried about your instalments, or weighing whether to refinance or sell? Roov's agent can run the numbers on your loan and lay out the options before you need them. Get in touch.