The cost of doing nothing: How ‘buy and hold’ can quietly work against homeowners

Clive Chng

/ Redbrick Mortgage Advisory

January 23, 2026 10:00 AM SGT

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Getting your first home and settling down for the long haul sounds good on paper — but as you get older, it comes at a cost (Photo: Shutterstock)

For many homeowners, the simplest property strategy feels like the safest one: buy a home, hold it, service the mortgage, and let time do the rest.

In Singapore, this approach has historically worked well. Property values have risen steadily, ownership has provided stability, and patience has often been rewarded.

But in 2026, a growing number of homeowners are discovering an uncomfortable truth: doing nothing with a property is still a decision — and it comes with consequences.

When time, not the market, becomes the constraint

Property is a long-term asset, but financing rules are not static. As homeowners grow older, loan tenures shorten, loan-to-value limits tighten, and borrowing capacity declines — even if the property itself has performed well. These constraints do not arrive suddenly; they accumulate

quietly over time.

By the time some homeowners realise they want to extract equity or purchase a second property, age — rather than affordability or asset value — becomes the binding constraint.

Case study 1: When equity exists but can no longer be used

The first case involves a lady in her early 60s who owns a landed property under her name, together with her son and daughter.

She purchased the property 16 years ago for $2.8 million. Today, it is valued at approximately $5.5 million, with an outstanding loan of about $800,000.

Earlier in her career, she was actively working and earning a stronger income. Over time, as she approached retirement, she slowed down professionally and her income naturally declined. She is still working today, but only on a part-time basis, and has continued servicing the monthly mortgage.

From a housing perspective, the property fulfilled its purpose well. It provided stability and a roof over her family’s head for many years.

From a financial planning perspective, however, the property remained largely passive.

Why age and income can lock equity in place

Private property owners generally can extract equity from their homes. However, extractability depends not just on property value, but on loan tenure, income and total debt servicing ratio (TDSR).

In her case, because of age, the maximum loan tenure available is capped at 15 years, up to age 75.

With an outstanding loan of $800,000 over a 15-year tenure, the monthly instalment works out to roughly $5,918 for TDSR calculations. Even if she is drawing an income of $9,500, this single mortgage commitment already consumes a significant portion of her allowable debt servicing capacity.

As a result, despite sitting on substantial equity, she is unable to extract it.

This highlights a technical reality many homeowners overlook. As tenure shortens, monthly installments rise. As instalments rise, higher income is required to qualify. Yet as homeowners approach retirement, income typically moves in the opposite direction.

In other words, loan tenure compresses at the same time income weakens, making equity extraction increasingly difficult, even when asset values are high.

Had the property been reviewed earlier — when income was stronger and loan tenures were longer — the same asset could have supported broader financial objectives over time. Instead, time passed quietly, and options narrowed.

Case study 2: When loan tenure shrinks faster than borrowing power

The second case involves a 56-year-old homeowner who has owned a condo for eight years.

The property was purchased at $1.3 million and is now worth approximately $1.8 million. He and his spouse have already completed a decoupling exercise.

He is still working and keen on investing, with the intention of purchasing a second property. However, he quickly discovered that his loan eligibility was far lower than expected, not because of income, but because of loan tenure.

If he wishes to take a loan of more than 55% loan-to-value, his maximum loan tenure is capped at age 65. At 56, this gives him a remaining tenure of just nine years.

Assuming a monthly income of $9,000 and a stress-tested interest rate of 4%, his maximum loan eligibility over a nine-year tenure works out to approximately $448,000. This significantly limits the range of properties he can realistically afford, even though he is still fully employed.

Stretching tenure comes with a different cost

To improve loan eligibility, he can stretch his loan tenure to age 75, giving him a 19-year tenure. However, doing so caps his maximum loan at 55% of the property's value and requires a mandatory 10% cash down payment.

Under the same income and stress-test assumptions, a 19-year tenure increases his loan eligibility to about $789,000. While this improves borrowing power, it also means that 45% of the property value, along with the buyer’s stamp duty, must be funded using cash or CPF.

In practical terms, capital that might otherwise have been reserved for retirement or investment must now be committed upfront into the property, significantly reducing flexibility.

If he simply holds the property passively and relies on rental income alone, he is likely to face the same structural challenge as the first homeowner in future: substantial equity on paper, but limited usability due to age and income constraints.

Why this matters for HDB owners as well

The same “buy and hold” dynamic can apply to HDB owners, though the structural considerations are different.

HDB ownership provides long-term housing stability, and many households rightly prioritise affordability, security and family needs. However, from a financing perspective, HDB owners generally do not have access to tools such as decoupling or equity term loans that are available to private property owners.

This means that as incomes rise and flat values appreciate, a significant portion of household wealth can remain locked within the property.

For HDB owners, the primary way to unlock equity and refresh borrowing capacity is often through selling and buying another property. Selling and buying does more than change a home. It allows the homeowner to re-leverage a higher income profile for a larger loan, and to free up equity through the transaction.

That equity can then be redeployed more intentionally — whether into a higher-value home, or other investments that may generate returns higher than the mortgage rate, which is generally relatively low in Singapore.

Without periodic upgrading or right-sizing moves, some HDB owners may unknowingly end up in a position similar to the private homeowners described earlier: asset-rich on paper, but less flexible in practice, particularly as age compresses loan tenure and borrowing power.

It is important to acknowledge that household circumstances, eligibility conditions and personal priorities differ, and not every HDB owner should or needs to move. However, without periodic review, some owners may find that equity remains trapped, while age-related tenure limits will gradually reduce future flexibility.

In such cases, the constraint is not the flat's value, but the structure that governs how that value can be accessed and redeployed.

Why ‘buy and hold’ can lead to being priced out

In both cases, the homeowners did not make poor decisions. Their properties appreciated. Their mortgages were serviced. On paper, they did well. The issue was timing.

Property markets tend to move forward over time. Loan eligibility, however, often moves in the opposite direction as age increases. When properties are left unreviewed for long periods, homeowners may find that by the time they want to act, the market has advanced while eligibility has retreated.

This is how homeowners can become priced out not by poor choices, but by inaction.

Why long-held assets should not sit idle

Properties in Singapore are typically held as assets for decades. If that is the case, it raises an important question: why let such a significant asset sit idle, contributing only capital appreciation and basic rental income, when it could be working harder alongside us?

This is not an argument for constant buying, selling, or aggressive leverage. It is an argument for periodic, intentional review, especially during years when income is strong and loan tenures are favorable.

Technically and practically, it requires more effort to make property decisions as we grow older — not less.

Starting 2026 with awareness

The start of 2026 presents homeowners with a rare opportunity. Interest rates have stabilised, urgency has eased, and there is space to review property decisions calmly rather than reactively.

The real lesson from these cases is not about market timing, but about time itself. When property is something we hold for the long term, it should not merely sit idle. It should work alongside us, supporting better choices, greater flexibility, and a more secure life at every stage.

In property planning, the most expensive decision is often not the wrong move, but the one that was never revisited.