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The Ultimate Compilation of Housing/Mortgage Loans in Singapore

We will let you in on a little secret. The cost of getting a home in Singapore has officially put marriage on hold for a lot of Singaporeans.

You know how couples are always talking about how getting married involves more than two people? It is true.

The typical scenario of getting married in Singapore

First, you want to get married.

Get married Singapoew

After which, you meet the parents which many times involve holding a wedding banquet.

You went on to hold a wedding banquet, blowing close to S$40,000 for a room full of relatives and friends (many whom you have never spoken to in the past years). 

Of which, you managed to recoup about S$25,000 from all the “Red Packets”.

Your headache does not end there.

While dealing with the organising of the wedding ceremony, the cost of your home is constantly bugging you.

Should you go for a HDB loan of head over to the bank for their home loan packages?

Should you decide to get a mortgage loan from the bank, you are opening doors to the bombardment of advertisements and sales pitch from the banks.

Now fret not. Seedly is here to remove a little bit of a headache from the above equation. In this article, we will help you do a little comparison for all the mortgage loans.

A quick recap: Should I go for HDB Loan or a Bank Loan

A quick recap on the characteristics of HDB loan and Bank loan:

 

HDB Loan

Bank Loan

Interest RateCurrently 2.6%
( 0.1% above the CPF Ordinary Account interest rate.)
Currently 1.3% - 2.4%
(Depends on the bank and benchmark, interest rates fluctuates)
DownpaymentCPF/Cash at least 5% in cash
The rest using CPF OA savings
Maximum Loan New flats: 90% of the purchase price. 

Resale flats: 90% of the resale price or market valuation, whichever is lower.
80% of the purchase price. 
Late Payment Penalty Currently 7.5% per annumDepends on individual banks. Usually less lenient than HDB.

Read more: The Complete Guide: Bank Loan vs HDB Loan, Which is Better? 


Fixed rate vs Floating for your home loan

Having made up your mind to settle for a bank loan, a major consideration will be choosing between a fixed or floating interest rate package.

What Is Fixed rate for mortgage/ housing loans?

For fixed rate packages, the same interest rate is maintained throughout the lock-in period.

Here’s what this means:

  • During the lock-in period which usually ranges from 1 to 5 years, the interest rate is fixed.
  • This is regardless of the market condition, even when it is a rising interest rate environment.
  • After the lock-in period, the interest rate will be converted to a floating interest rate.
  • This is a good option if interest rates and low and when the buyer wants to budget with certainty over the initial lock-in period.

What is Floating rate for mortgage/housing loans?

As for floating rate, the rate changes from time to time.

Here’s what this means:

  • The interest rate is influenced by the SIBOR and SOR rate.
  • In a rising interest rate environment, one may end up paying more for his loan.
  • Consumers can choose between 1-month, 3-months, 6-months and 12-months SIBOR or SOR rates to peg their interest to.

Which should you choose? Fixed Rate vs Floating Rate

Here are some factors which should influence your decision when it comes to choosing between a fixed rate or a floating rate.

Interest Rate environment

  • In a rising interest rate environment, a fixed rate mortgage loan will be a better option as we lock our interest rate to the current one. In contrast, in a declining interest rate, a floating rate is better for consumers.

Financial Certainty

  • For someone who prefers to be certain about the amount he needs to pay for his loans moving forward, a fixed rate mortgage loan offers that certainty.
  • For someone who understands the market and is more than happy to monitor the fluctuation of SIBOR and SOR rates, a floating rate works best.

Banks are pegging their interest to these rates!

Banks use various benchmark to peg their loan interest rates, this makes comparing of loans even harder!

This will be further demonstrated in the compilation below.

Before we head over to the mess, it is good to understand the different rates bank uses:

  • SIBOR
    SIBOR is defined as the Singapore interbank offered rate. It is based on the interest rates used by banks in Singapore and the rate they charge one another when they borrow from each other.
    Loans are pegged in denominations of 1,3,6 and 12 months, depending on the bank.
  • Board rates
    These are rates that are determined by the bank internally.
  • Fixed Deposit Pegged Rate (FDPR) 
    Fixed deposit rates of the bank. Banks usually use the rates between 6 to 12 months instead. Do note that individual bank uses a different name for this. DBS, for example, uses FHR8.
  • SOR
    The effective cost of borrowing in Singapore Dollars synthetically by borrowing USD for the same maturity.

Best Home Loan For HDB (Fixed rate)

Before we kick off with the comparison, here are some assumptions we made:

  • Assuming a loan size of S$350,000
  • For a period of 25 years
  • Loans are for completed HDB
BankFixed rate Lock-in periodInterest rate p.a
(Year 1)
Interest rate p.a
(year 2)
Interest rate p.a
(year 3)
Interest rate p.a
(thereafter)
Loans pegged to
Hong Leong Finance2 Years1.68%
(fixed)
1.75%
(fixed)
HHR - 2.60HHR - 1.25HHR
3 Years1.80%
(fixed)
1.90%
(fixed)
2.40%
(fixed)
HHR - 1.25
MayBank 1 Year1.75%
(fixed)
FDR - 0.22FDR
HSBC2 Years1.80%
(fixed)
1.80%
(fixed)
1 month SIBOR + 0.75
1 Month SIBOR + 1.00%
(thereafter)
1 Month SIBOR
3 Years1.90%
(fixed)
1.90%
(fixed)
1.90%
(fixed)
SIBOR + 1.00%
1 Month SIBOR
State Bank of India
(SBI)
2 Years1.85%
(fixed)
1.85%)
(fixed)
BD (SBI) - 4.05BD (SBI)
3 Years1.75%
(fixed)
1.85%
(fixed)
1.95%
(fixed)
BD (SBI) - 1.90
Citibank2 Year1.80%
(fixed)
1.85%
(fixed)
1 Month SIBOR + 0.851 Month SIBOR
Bank of China2 Year1.75%
(fixed)
1.75%
(fixed)
3 months SIBOR + 0.70%3 Months SIBOR
3 Years1.80%
(fixed)
1.80%
(fixed)
1.85%
(fixed)
3 months SIBOR + 0.70%
DBS2 Years1.85%
(fixed)
1.85%
(fixed)
FHR8 + 1.75FHR8
3 Years1.85%
(fixed)
1.85%
(fixed)
1.95%
(fixed)
FHR8 + 1.75
Standard Chartered2 years1.85%
(fixed)
1.85%
(fixed)
1 Month SIBOR + 0.851 Month SIBOR

Best Home Loan for HDB (Floating Rate)

Assuming the same assumptions:

  • Assuming a loan size of S$750,000
  • For a period of 25 years
  • Loans are for a completed property
BankLock-in periodInterest rate p.a
(Year 1)
Interest rate p.a
(year 2)
Interest rate p.a
(year 3)
Interest rate
(thereafter)
Loans pegged to
CIMB Bank2 Years1 month SIBOR + 0.90%1 month SIBOR + 1.75%1 Month SIBOR
CitiBank2 Years1 months SIBOR + 0.50%1 months SIBOR + 0.55%1 months SIBOR + 0.85%1 Month SIBOR
DBS2 YearsFHR8 (DBS) + 1.45%FHR8
(DBS)
NoneFHR8 (DBS) + 1.75%
Hong Leong Finance2 YearsBoard + 1.60%Board + 1.65%Board + 1.80%Board + 3.25%HLF-BD (HDB)
2 YearsBoard + 2.83%Board + 3.13%Board + 3.53%Board + 3.58%
HSBC2 Years1 Month SIBOR + 0.40%1 Month SIBOR + 0.55%1 Month SIBOR + 0.75%1 Month SIBOR
2 YearsTDMR (HSBC) + 1.00%TDMR
(HSBC)
Maybank3 YearsFDMR36 + 0.22%FDMR36 + 0.25%FDMR36 + 0.28%FDMR36 + 0.59%FDMR36
OCBC 2 Years3 Month SIBOR + 0.40%3 Month SIBOR + 0.60%3 Month SIBOR
2 YearsOCR (OCBC) + 0.65%OCR (OCBC) + 0.70%OCR (OCBC) + 0.75%OCR (OCBC) + 0.80%
(Year 4)

OCR (OCBC) + 0.90%
OHR
(OCBC)
State Bank of India3 Years3 Month SIBOR + 0.55%3 Month SIBOR + 0.75%3 Month SIBOR
None3 Month SIBOR + 0.75%
Standard CharteredNone1 Month SIBOR + 0.68%1 Month SIBOR + 0.88%1 Month SIBOR
None3 Month SIBOR + 0.58%3 Month SIBOR + 0.88%3 Month SIBOR
2 YearsFDR9 (SCB) + 1.45%FDR9
(SCB)
UOBNoneFDPR_14(UOB) + 1.75%FDPR_14(UOB)
1 Year1 Month SIBOR + 0.50%1 Month SIBOR + 0.50%1 Month SIBOR + 0.50%1 Month SIBOR + 0.65%1 Month SIBOR
2 YearsFDPR_14(UOB) + 1.40%FDPR_14(UOB)

Best Home Loan For Private Residential Property (Fixed rate)

Before we kick off with the comparison, here are some assumptions we made:

  • Assuming a loan size of S$750,000
  • For a period of 25 years
  • Loans are for a completed property
BankFixed rate Lock-in periodInterest rate p.a
(Year 1)
Interest rate p.a
(year 2)
Interest rate p.a
(year 3)
Interest rate p.a
(thereafter)
Loans pegged to
HSBC2 Years1.75%
(fixed)
1.80%
(fixed)
1 month SIBOR + 0.75%
1 Month SIBOR + 1.00%
(thereafter)
1 Month SIBOR
Bank of China2 Years1.75%
(fixed)
3 Month SIBOR + 0.70%3 Month SIBOR
3 Years1.80%
(fixed)
1.85%
(fixed)
3 Months SIBOR + 070%
State Bank of India3 Years1.75%
(fixed)
1.85%
(fixed)
1.95%
(fixed)
BD (SBI) - 3.95%BD (SBI)
Citibank2 Years1.80%
(fixed)
1.85%
fixed)
1 Month SIBOR + 0.85%1 Month SIBOR
CIMB3 Years1.80%
(fixed)
1.85%
(fixed)
1.90%
(fixed)
1 Month SIBOR + 0.601 Month SIBOR
DBS2 Years1.85%
(fixed)
1.85%
(fixed)
FHR8 + 1.75%FHR8
3 Years1.85%
(fixed)
1.85%
(fixed)
1.95%
(fixed)
FHR8 + 1.75%
UOB2 Years1.85%
(fixed)
1.85%
(fixed)
14FDPR + 1.60%14 FDPR

Best Home Loan for Private Residential Property (Floating Rate)

Assuming the same assumptions:

  • Assuming a loan size of S$750,000
  • For a period of 25 years
  • Loans are for a completed property
BankLock-in periodInterest rate p.a
(Year 1)
Interest rate p.a
(year 2)
Interest rate p.a
(year 3)
Interest rate
(thereafter)
Loans pegged to
CIMB Bank2 Years1 month SIBOR + 0.40%1 month SIBOR + 0.60%1 Month SIBOR
Maybank3 yearsFDMR36 + 0.22%FDMR36 + 0.25%FDMR36 + 0.28%FDMR36 + 0.59%FDMR36
DBS2 YearsFHR8 + 1.45%FHR8
UOBNone14FDPR + 1.40%14FDPR
HSBC2 YearsTDMR24 + 1.00%TDMR24
2 Years1 Month SIBOR + 0.25%1 Month SIBOR + 0.30%1 Month SIBOR
OCBC2 Years3 Month SIBOR + 0.10%3 Month SIBOR + 0.20%3 Month SIBOR + 0.30%3 Month SIBOR + 0.50%3 Months SIBOR
2 YearsOHR + 0.65%OHR + 0.70%OHR + 0.75%OHR + 0.80%
(Year 4)

OHR + 0.90%
OHR
Citibank2 Years1 Month SIBOR + 0.25%1 Month SIBOR + 0.30%1 Month SIBOR + 0.30%1 Month SIBOR + 0.90%1 Month SIBOR
Standard Chartered2 Years9FDR + 1.45%9FDR

 

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