If you cannot repay: what happens to your home and your pension

Nobody buys a flat planning to default. But a pledged pension is still your retirement money, so it is worth knowing the order of events.

The rule

The Pension Office: "On default of a loan obtained through this scheme, the initial course of action will be to sell the housing unit… If the amount received through the sale of the housing unit is insufficient to recover the loan amount, the balance amount required to settle the loan will be released from the collateralized amount to the loan issuer."

So:

1. The home is sold first.
2. The sale proceeds go to the loan.
3. Only any shortfall is taken from your pledged pension.
4. Whatever is left of the pledged amount should return to your RSA. Confirm this with your lender, as the Pension Office does not spell it out.

A worked example

You owe MVR 2.1 million, with MVR 400,000 pledged from your pension.

• The flat sells for MVR 2.3 million. The loan is cleared and your pension is untouched.
• The flat sells for MVR 1.9 million. The MVR 200,000 shortfall comes from your pension. MVR 200,000 of the pledge remains.
• The flat sells for MVR 1.6 million. The MVR 500,000 shortfall uses all MVR 400,000 of your pension. You may still owe the lender MVR 100,000, plus any sale costs and fees.

Illustrative figures. A forced sale often fetches less than a normal one, and fees and arrears add to what is owed.

Before it comes to that

• Talk to your lender early. Most lenders can reschedule a loan. HDFC, for example, lists a restructuring fee of MVR 1,500.
• Keep the home insured. Most lenders require cover for the whole term.
• Leave a margin. Choose a payment that would still be affordable if your income fell.

Pension Office: hotline 1441, Viber 733 1441, info@pension.gov.mv, pension.gov.mv. Your pledgeable amount is on your RSA statement, in the Pension mobile app and on the website.

From the Maldives Pension Administration Office's own housing pages, FAQ and leaflet, read on 18 October 2026. Your lender's terms decide the rest; confirm them before you commit. General information, not financial advice.