Announcing this on his Facebook Page, Minister of State for Manpower and National Development Tan Chuan-Jin said the move will benefit 80 per cent of CPF (Central Provident Fund) members who are currently paying these annual premiums.
They will enjoy an average discount of about 12 per cent.
For example, a male member, aged 36 years old, who is servicing a S$150,000-housing loan from the Housing and Development Board for 25 years will pay a premium of S$195.30, instead of S$223.05 when he joins the scheme from 1 January.
That is a discount of 12 per cent.
Members who join the HPS scheme on or after 1 January will get to enjoy the new rates. Existing members paying annual HPS premiums will pay the lower premiums when they renew or adjust their HPS coverage on or after 1 January.
The HPS is a mortgage-reducing insurance scheme and has been around since 1981.
It protects CPF members and their families from losing their homes, should the CPF member become permanently incapacitated or pass away before their home loans are paid up. The key objective of HPS is to provide home protection to as many CPF members as possible.
Premiums can be paid from a member's CPF Ordinary Account savings.
The CPF Act was also recently amended to allow for the portability of HPS cover to a newly acquired property, meaning that CPF Board will waive the requirement of good health if the member's previous property was under HPS.
Mr Tan said he was glad this adjustment had been made.
He added: "It is important to keep HPS sustainable and affordable to members for the long term. While I hope that we will never ever need to file a claim from HPS, it is assuring to know that our family members are protected against losing their homes, should anything unfortunate happens to us."
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