What is the best home loan in Singapore ?

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When it comes to buying your home, it goes without saying that we want to(and should) rack in as much savings as humanly possible and get the best home loan in Singapore. We are talking about something that takes 2-3 decades to pay off after all!  It is possibly the biggest purchase of our lifetime. Here, we have gather and analyzed over 100 mortgage packages across 16 banks in Singapore to help you find one that tailors to your situation best.

Contents

Cheapest home loan in Singapore ?

The table below provides the raw data which includes all the home loan packages in Singapore. You can sort by interest rate to find one with the cheapest rate. For many of your purchases, we have to admit that it is a good idea to compare choices solely by costs. In the case of your home loan, the package with the lowest home loan rates in Singapore may come with some unfavorable terms that could jeopardize your finances. So we implore you to look beyond just the interest rate and consider your own needs as well.

 

A major factor

A home loan is very different from the typical unsecured loans you see, such as personal or renovation loan where calculation is based on flat add-on method.

Instead of looking at interest rate first(like most people do), it will be wise to shift your attention to ‘rate type’ instead.

You wouldn’t look at airfares and exclaim ,”why is this business class ticket so much more expensive than this economical class ticket !? ” would you ? You understand that business class is more premium and understandably commands higher rate. Likewise, the type of home loan you are getting determines the interest rate you should expect.

Fixed rate home loan packages come with higher interest rates than floating rates packages. SIBOR, SOR and the other unfamiliar looking names all belong to the category of floating rates. In a nutshell, there are 2 main categories: fixed rate and floating rates home loan.

Here, we zoom in to the best rates for each of the different type of property and home owner.

Best Fixed rate home loan for HDB

This table shows the best fixed rates during the current period. In this category, the 3 banks that emerge as winners are Maybank, DBS and UOB.

Fixed rates home loan packages are popular because it provides the stability and security to hedge against other financial risks we may carry. Its take-up rate is especially high during uncertain economic times. The security it offers is offset by the higher premiums it commands. Fixed rates are usually more expensive than floating rates by about 0.3% annual interest. For a loan of $500,000, it translates to approximately $1500 a year. Fixed rates mortgages have interest rates that can be fixed for a period of 1 to 5 years, though in recent years, 5-years fixed rates have become a rare sight.

After the lock-in period, interest rates become ‘floating’ which makes them the same as their floating rates package counterparts. In this case, references rates are the FDMR for Maybank , FHR for DBS and FDPR for UOB. In essence, they are  all of the same nature whose rates pegged to fixed deposit rates in the bank. (More on that later)

Bank MAYBANK DBS UOB
Reference Rate New Purchase & Refinancing New Purchase/ Refinancing New Purchase/ Refinancing
Lock in 1 Years 3 years 2 years
Year 1 1.59%(Fixed) 1.68%(fixed) 1.58%(fixed)
Year 2 FDMR36(1.2%) + 0.39% =1.59% 1.68%(fixed) 1.58%(fixed)
Year 3 FDMR36(1.2%) + 0.39% =1.59% 1.68%(fixed) (FDPR +1.03%)=1.68%
Year 4 FDMR36(1.2%) + 0.79% =1.99% FHR 9(0.25%) + 1.55% =1.75% (FDPR +1.03%)=1.68%
Year 5 FDMR36(1.2%) + 0.79% =1.99% FHR 9(0.25%) + 1.55% =1.75%  (FDPR +1.03%)=1.68%
Thereafter FDMR36(1.2%) + 0.79% =1.99% FHR 9(0.25%) + 1.55% =1.75% (FDPR +1.03%)=1.68%
Legal subsidy (Refinance) 0.2% cap at 2K for refi (Reimbursement period is 3 years) >$200k 500k> : $1500
1million – 3million : $2000
above 3million : $3000- Base on existing loan amount, does not include gear up
0.4% of loan amount (capped 1.5K) applies to >200K loan
Valuation subsidy (Refinance) Nil Nil Nil
Fire insurance (Refinance) Nil Nil Nil
Partial repayment penalty 1.50% 1.50% 1.50%
Full redemption penalty 1.50% 1.50% 1.50%
Cancellation fees 0.75% 1.50% 1.50%
Pricing Reset Date 0.75% on prepaid amount Nil Nil
Minimum loan $200,000 $100,000 $100,000
Processing fee Nil Nil Nil
Other Conditions Nil Nil Nil
Remarks FDMR16 : 1.20%

Commencement Date: 3 months from LO or 1st disbursement whichever is earlier

Prepayment penalty fee: 1.50%

Commitment Fee: 1.25% (waiver of due to sales of property)

admin fee: 0.25%

cancellation Fee: 1.25%.

Best FD Pegged rate (Floating) home loan for HDB

Bank SCB DBS
Reference Rate New Purchase/Refinance New Purchase/ Refinancing
Lock in 2 Years 2 years  -MPM
Year 1 FDR + 0.78% = 1.28% FHR 9 + 1.13% =1.38%
Year 2 FDR + 0.88% =1.38% FHR 9 + 1.13% =1.38%
Year 3 FDR + 0.88% =1.38% FHR 9 + 1.13% =1.38%
Year 4 FDR + 1.08% =1.58% FHR 9 + 1.13% =1.38%
Year 5 FDR + 1.08% =1.58% FHR 9 + 1.13% =1.38%
Thereafter FDR + 1.08% =1.58% FHR 9 + 1.13% =1.38%
Legal subsidy (Refinance) $1,800 flat
(loan size > $500k & Priority clients only)
500k> : $1500
1million – 3million : $2000
above 3million : $3000- Base on existing loan amount, does not include gear up
Valuation subsidy (Refinance) Nil Nil
Fire insurance (Refinance) Nil Nil
Partial repayment penalty 1.50% 1.50%
Full redemption penalty 1.50% 1.50%
Cancellation fees 1.50% 1.50%
Pricing Reset Date Nil Nil
Minimum loan $500,000 $100,000
Processing fee Nil Nil
Other Conditions Nil Nil
Remarks 48M Fix Deposit Board Rate @0.50%/annum FHR 9 : 0.25%

Best Sibor rate home (Floating) loan for HDB

Bank SCB SCB
Reference Rate New Purchase/Refinance New Purchase/Refinance
Lock in 2 Years 2 Years
Year 1 1M sibor + 0.68% =1.49% 3M sibor + 0.58% =1.58%
Year 2 1M sibor + 0.68% =1.49% 3M sibor + 0.58% =1.58%
Year 3 1M sibor + 0.68% =1.49% 3M sibor + 0.58% =1.58%
Year 4 1M sibor + 0.88% = 1.69% 3M sibor + 0.88% =1.88%
Year 5 1M sibor + 0.88% = 1.69% 3M sibor + 0.88% =1.88%
Thereafter 1M sibor + 0.88% = 1.69% 3M sibor + 0.88% =1.88%
Legal subsidy (Refinance) $1,800 flat
(loan size > $500k & Priorityclients only)
$1,800 flat
(loan size > $500k & Priority clients only)clients only)
Valuation subsidy (Refinance) Nil Nil
Fire insurance (Refinance) Nil Nil
Partial repayment penalty Nil Nil
Full redemption penalty Nil Nil
Cancellation fees 1.50% 1.50%
Pricing Reset Date Nil Nil
Minimum loan $100,000 $100,000
Processing fee Nil Nil
Other Conditions Nil Nil
Note 1-month SIBOR at 0.8103%

on 11 June 2017

 

3-month SIBOR at 0.9988%on 11 June 2017

on 11 June 2017

Remarks Mortgageone feature

strictly for Completed Property.

Mortgageone feature

strictly for Completed Property.

For HDB home buyers, other than the offerings by the various banks in Singapore, you can opt to borrow the money for home purchase from HDB itself (Be sure to check out your eligibility first). It may be tempting to obtain your loan from HDB but it may not always be the best option. And when it comes to something as important as home loan, you definitely want to do abit more due diligence. HDB is not without its cons. Think about it, banks are commercial entities that require huge amount of funds to carry out lucrative investments on their part. Hence they are willing to offer very attractive interest rates to get your business, not to mention that there are 15 other banks competing with them for your business. In such competitive situation, consumers become the biggest beneficiary. On the other hand, HDB offers you stability in rates at the expense of higher interest payment. For more information, check out our ultimate HDB home loan guide to better decide whats best for you.

Best fixed rate home loan for Private Properties

Bank MAYBANK BOC BOC
Reference Rate  

New Purchase & Refinancing

New Purchase & Refinancing New Purchase & Refinancing
Lock in 1 Years 2 Years 3 Years
Year 1 1.59%(Fixed) 1.58% (fixed) 1.48% (fixed)
Year 2 FDMR36 + 0.39% =1.59% 1.58% (fixed) 1.58% (fixed)
Year 3 FDMR36 + 0.39% =1.59% 3M sibor + 0.70% =1.7% 1.68% (fixed)
Year 4 FDMR36 + 0.79% =1.99% 3M sibor + 0.70% =1.7% 3M sibor + 0.70% =1.7%
Year 5 FDMR36 + 0.79% =1.99% 3M sibor + 0.70% =1.7% 3M sibor + 0.70% =1.7%
Thereafter FDMR36 + 0.79% =1.99% 3M sibor + 0.70% =1.7% 3M sibor + 0.70% =1.7%
Legal subsidy (Refinance) 0.2% cap at 2K for

refi (Reimbursementperiod is 3 years) >$200k

period is 3 years) >$200k

0.4% of loan amount (capped 1.6k) 0.4% of loan amount (capped 1.8k)
Valuation subsidy (Refinance) Nil Nil Nil
Fire insurance (Refinance) Nil Nil Nil
Partial repayment penalty 1.50% 1.50%+0.25%(Admin fee) 1.50%+0.25%(Admin fee)
Full redemption penalty 1.50% 1.50%+0.25%(Admin Fee) 1.50%+0.25%(Admin Fee) – (No penalty / admin fee due to sale of property)
Cancellation fees 0.75% 1.50% 1.50%
Pricing Reset Date 0.75% on prepaid amount Nil Nil
Minimum loan $200,000 $500,000 $500,000
Processing fee Nil Nil Nil
Other Conditions Nil Nil Nil
Remarks FDMR16 : 1.20% 3-month SIBOR at 0.9988% on 11 June 2017 3-month SIBOR at 0.9988% on 11 June 2017
Full legal subsidy

(min loan $500k – max loan $3mil).For pure refinancing only(no fresh term loan) Selected Law firm only.

For pure refinancing only(no fresh term loan)Selected Law firm only.

Selected Law firm only.

Best FD Pegged rate(Floating) home loan for Private Properties

Bank DBS SCB
Reference Rate New Purchase/ Refinancing New Purchase/Refinance
Lock in 2 years  -MPM 2 Years
Year 1 FHR 9 + 1.13% =1.38% FDR + 0.78% = 1.28%
Year 2 FHR 9 + 1.13% =1.38% FDR + 0.88% =1.38%
Year 3 FHR 9 + 1.13% =1.38% FDR + 0.88% =1.38%
Year 4 FHR 9 + 1.13% =1.38% FDR + 1.08% =1.58%
Year 5 FHR 9 + 1.13% =1.38% FDR + 1.08% =1.58%
Thereafter FHR 9 + 1.13% =1.38% FDR + 1.08% =1.58%
Legal subsidy (Refinance) 500k> : $1500
1million – 3million : $2000
above 3million : $3000- Base onexisting loan amount, does not include gear up
$1,800 flat
(loan size > $500k &Priority clients only)
Valuation subsidy (Refinance) Nil Nil
Fire insurance (Refinance) Nil Nil
Partial repayment penalty 1.50% 1.50%
Full redemption penalty 1.50% 1.50%
Cancellation fees 1.50% 1.50%
Pricing Reset Date Nil Nil
Minimum loan $100,000 $500,000
Processing fee Nil Nil
Other Conditions Nil Nil
Remarks FHR 9 : 0.25% 48M Fix Deposit Board Rate @0.50%/annum

Best Sibor rate (Floating) home loan for Private Properties

Bank SCB SCB CITI
Reference Rate New Purchase/Refinance New Purchase/Refinance New Purchase/ Refinancing
Lock in 2 Years 2 Years 2 Years
Year 1 1M sibor + 0.68% =1.49% 3M sibor + 0.58% =1.58% 1M/3M/6M/12M SIBOR +0.58%
Year 2 1M sibor + 0.68% =1.49% 3M sibor + 0.58% =1.58% 1M/3M/6M/12M SIBOR +0.58%
Year 3 1M sibor + 0.68% =1.49% 3M sibor + 0.58% =1.58% 1M/3M/6M/12M SIBOR +0.58%
Year 4 1M sibor + 0.88% =1.69% 3M sibor + 0.88% =1.88% 1M/3M/6M/12M SIBOR +1.00%
Year 5 1M sibor + 0.88% =1.69% 3M sibor + 0.88% =1.88% 1M/3M/6M/12M SIBOR +1.00%
Thereafter 1M sibor + 0.88% =1.69% 3M sibor + 0.88% =1.88% 1M/3M/6M/12M SIBOR +1.00%
Legal subsidy (Refinance) $1,800 flat
(loan size > $500k & Priority clients only)
$1,800 flat
(loan size > $500k & Priority clients only)
0.2% of loan amount

(capped $2.5K) applies to >500k loan

Valuation subsidy (Refinance) Nil Nil Nil
Fire insurance (Refinance) Nil Nil Nil
Partial repayment penalty Nil Nil 1.50%
Full redemption penalty Nil Nil 1.50%
Cancellation fees 1.50% 1.50% 1.50%
Pricing Reset Date Nil Nil 0.5% on amount prepaid
Minimum loan $100,000 $100,000 > $500,000
Processing fee Nil Nil Nil
Other Conditions Nil Nil Nil
Remarks Mortgageone feature strictly for Completed Property. Mortgageone feature strictly for Completed Property. For refinancing of owner occupied properties, we use a higher TDSR and we do not need other loan statements, which makes application and approval much simplier.
1-month SIBOR at 0.8103% on 11 June 2017 3-month SIBOR at 0.9988% on 11 June 2017 For loans $1.5M & above, rates are further negotiable

Private properties buyers forms the largest group of all consumers looking at bank loans in Singapore. Your choice of home loan will really vary vastly on an individual level. For example, if you are well-read with the trends around the economic situation in Singapore and are very optimistic about its future, you will opt for the floating rate interest packages so you can take advantage of the lower interest rates that soon follows. Having a strong understanding of the happenings of the world would be most helpful as well, because Singapore’s economy is closely tied to that of the rest of the world, particularly US.  On the other hand, if you are more conservative or think that things are going to get gloomier in the foreseeable future, then you obviously want to lock in your current rates as long as possible with the fixed rates packages.

Best home loan for Buildings Under Construction(BUC)

Bank SCB SCB CITI MAYBANK
Reference Rate New Purchase New Purchase New Purchase New Purchase
Lock in No Lock In –Applicable for Priority clients under Private Residential Properties only No Lock In –Applicable for Priority clients under Private Residential Properties only No Lock In No Lock In
Year 1 1M sibor + 0.68% =1.49% 3M sibor + 0.58% =1.58% 1M/3M/6M/12M SIBOR +0.57% FDMR36 + 0.08%= 1.28%
Year 2 1M sibor + 0.68% =1.49% 3M sibor + 0.58% =1.58% 1M/3M/6M/12M SIBOR +0.57% FDMR36 + 0.18% =1.38%
Year 3 1M sibor + 0.68% =1.49% 3M sibor + 0.58% =1.58% 1M/3M/6M/12M SIBOR +0.57% FDMR36 + 0.28% =1.48%
Year 4 1M sibor + 0.88% =1.69% 3M sibor + 0.88% =1.88% 1M/3M/6M/12M SIBOR +1.10% FDMR36 + 0.60% =1.8%
Year 5 1M sibor + 0.88% =1.69% 3M sibor + 0.88% =1.88% 1M/3M/6M/12M SIBOR +1.10% FDMR36 + 0.60% =1.8%
Thereafter 1M sibor + 0.88% =1.69% 3M sibor + 0.88% =1.88% 1M/3M/6M/12M SIBOR +1.10% FDMR36 + 0.60% =1.8%
Legal subsidy (Refinance) Nil Nil Nil Nil
Valuation subsidy (Refinance) Nil Nil Nil Nil
Fire insurance (Refinance) Nil Nil Nil Nil
Partial repayment penalty Nil Nil Nil Nil
Full redemption penalty Nil Nil Nil Nil
Cancellation fees 1.50% 1.50% 0.75% 0.75%
Pricing Reset Date Nil Nil 0.5% on amount prepaid 0.75% on prepaid amount
Minimum loan $100,000 $100,000 >= $500,000 $200,000
Processing fee Nil Nil Nil Nil
Other Conditions Nil Nil Nil Nil
Remarks Free one time conversion Free one time conversion ·         Deposits in your Citibank savings account, up to the outstanding loan amount,  earns 50% interest on the rate you pay for your home loan
·         Free one time conversion upon TOP
FDMR16 : 1.20%
Notes 1-month SIBOR at 0.8103% on 11 June 2017 3-month SIBOR at 0.9988% on 11 June 2017

Best home loan for foreigners

Home-Loan-best

I would love to say that there is a financing plan tailored specially for foreigners, but there simply isn’t. Even so, we still included this section because we have many non-locals asking what is the best home loan for them. In those cases, we make certain assumptions. For example, if you are not exactly well versed and in tune with the economic movements in Singapore, it is recommended that one goes for SIBOR or SOR type home loan. Both of them are pegged to a benchmark is vastly determined by economic conditions, thereby  removing the need for the borrower of such loan to monitor the situation every so often. Some find SOR an even better pegged-rate than the other because SOR is linked to US economy that our western friends may have a better understanding of. Classic investment principle applies here, put your money where you know best.

Best home loan for 1st time home buyers

For 1st time buyers, it is advised that you go with a stable interest rate package. They are easy to understand and provides more security. In this current economic climate fraught with uncertainties, it may be wise to maintain certain level of stability when it comes to home loan. This will ensure that your financial portfolio is not overly risky by balancing out the risk you may have in other areas of your life such as career etc.

Best home loan for investors

if you are alittle savvier with the property market, you can opt for the more risky floating interest rates. Of course, more risk always translates to better rewards. You can consider board rates or even fixed deposit pegged rates. These packages allow you to bail out quickly and switch to another loan package fast, which makes it suitable for someone who follows the market very closely . On top of that, if you have more cash on your hand and seeks some stability of your portfolio, fixed deposit pegged home loan is usually a good bet. If deposit rates go up, you no doubt pay more for your mortgage loan, but you also earn more interest from your savings account. Through this strategy, you hedge your financial risks. 

Whats the best category

Its not that hard to understand the difference between business class and economy class air tickets, isn’t it ? When it comes to home loan, however, it gets alittle technical.

Fixed rates mortgage loan usually only last for 1-5 years – the longer the fixed tenor, the more expensive the rates. Because the banks have to buy insurance to secure your fixed rates.

SIBOR stands for the Singapore interbank offered rate. Available in denominations of 1, 3, 6 & 12 months, SIBOR is determined by the interest rates used by banks in Singapore and the rate they charge one another when they borrow among themselves. Some banks may allow you to change amongst these various tenors.

The Swap Offer Rate (SOR) is more volatile than SIBOR, because it involves foreign exchange rates between the US Dollar and Singapore Dollar.

Fixed deposit pegged rates are the simplest reference rates to understand, but beware – they are not the easiest to predict. They are basically your fixed deposit rates, just bear in mind they are not always the usual fixed deposit rates you see in the market but could simply be more obscured ones.

Board rates are a library of rates determined internally by the bank. Usually lower at the start, they become increasingly mysterious as time progresses. If it changes, you only have 30 days to react, of course, assuming you could do something about it.

One man’s meat is another man’s poison. Obviously, there isn’t a one-size-fits-all loan type suitable for everyone. Every now and then, there will be special deals under each loan category, so be sure to look out for it!

 

 

Last but not least 

 

One more thing to note before you set off; you also need to get yourself familiar with the various terms that are attached to any home loan package, including things such as your reference rates, lock in period, reimbursement clauses and so on. Think of it as buying an air ticket and checking if extra luggage allowance is included, or meals are catered and etc. Of course it is more complicated for home loan. For more information, check out more on reading the fine print for home loans.

If you are refinancing your home loan and want to find the best refinancing rates package, there are again another set of guidelines you have to be aware of. Check out our ultimate refinancing guide in this case.

Lastly, you may want to know that banks roll out home loan promotions from time to time based on their supply and demand of funds. Hence, it pays to be updated of their interest rates regularly if you are looking to buy/refinance your home soon. Revised daily, the table you see above is about as updated as it can get when it comes to all the home loan packages in Singapore, (sometimes even more so than the published rates of banks themselves.) Be sure to bookmark this page and check out the latest rates in 2017 !!

 

Disclaimer: Every effort has been made to ensure that the information provided is accurate. You must not rely on this information to make a financial or investment decision. Before making any decision, we recommend you consult a professional advisor to take into account your particular objectives, financial situation and individual needs.

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