Mortgage for new home
So you’ve found the house you want to make your home. Or you are embarking on the biggest purchase of your life. Getting conditional approval for your home loan is an important step in the home buying journey. It allows you to look – and enquire – with confidence, and it helps narrow your options.
With loan conditional approval, you are different. You are demonstrating to the real estate agent that you are serious and real during negotiations with the seller or developer.
Conditional approval also provides a sense of reality. You know what you can afford, in addition to the fees and taxes required. Stamp duty, legal conveyancing fee, valuation fee, agent fee and the downpayment, are some of the numbers you should grapple with.
You should apply when you have done some initial research on the type of property, location and downpayment. Approval typically last for 30 days. So don’t apply too early. Talk to our independent mortgage consultant early. Compare the home loan offerings with this mortgage calculator.
This calculator helps you to compare 2018 Singapore home loan rates and estimate mortgage repayments. Our database are updated real-time, with all available home loan products for Singapore residential properties (HDB, Executive Condominiums, Private Condominiums, Landed Homes, BTOs and New Launches).
Your enquiry will be handled by an independent mortgage consultant. You will receive advice on selecting the right home loan and calculating your TDSR (Total Debt Servicing Ratio). Our consultants have a combined 50 years of experience and will guide you through the process.
We will assist you with the paperwork and apply the loan on your behalf. Yes, we are a one-stop shop and you may sit back instead of interacting with multiple banks.
We specialise in comparing home loans, to get the best mortgage outcome for you.
Types of home loan rates
A) SIBOR-linked – Singapore Interbank Offered Rate is the interest rate at which banks in Singapore borrow funds from other banks. It is set daily at 11am by Associate of Banks in Singapore (ABS) and published in Business Times. Simply put, it is the rate at which financial institutions lend unsecured funds to each other. SIBOR is known to offer full transparency of applied rate.
In the market now, most banks are offering 3-month SIBOR. However, there are few banks that are offering 1 month sibor. They are currently Standard Chartered, Citibank and HSBC. 1-month SIBOR is usually lower than 3-month SIBOR. If you think that SIBOR will remain relatively low in the next couple of years, either 1-month or 3-month SIBOR should be suitable for you. Citibank is the only bank that allows you to have an unlimited switch from 1-, 3-, 6- or 12-month SIBOR. If you are worried about rising SIBOR, do opt for 12-month SIBOR which effectively means you are fixing the rates for 1 year! HDB borrowers, take note: Only HSBC and Standard Chartered offer 1-month SIBOR mortgage. Some SIBOR mortgages allow you to do partial redemption.
B) SOR-linked – Swap Offered Rate is based on a formula that takes into account the current and expected exchange rates of the US dollar against the Singdollar and the local interbank lending rates for the greenback. Thus, a rising US market will definitely inflate SOR in the near future. So far, it remained historically low.
As of 2018, banks are not offered SOR-linked mortgages. In the past, Bank of China, OCBC, UOB and DBS offered SOR-pegged home loans. Excitement among borrowers was heightened when 3-month SOR was negative in 2011. ANZ recognised that home owners want a hybrid type of mortgage rates, hence they developed a rate known as 3-month COMBO which is the average of 3-month SIBOR and SOR.
C) Fixed Rates – Fixed rates as its name implies, are fixed and do not fluctuate for a period of time, for example 2, 3 years or 5 years term. It will become a floating rate after the fixed rate term. Unfortunately, there is no fixed rate package for the whole of loan tenor in Singapore. Fixed interest rates charged are generally higher than variable rate packages. It protects against interest rate hikes during fixed interest rate period. Usually it does not allow flexibility to do partial redemption
D) Board Rate-linked – This is the Bank’s own internal board rate, determine by cost of structures and costs in maintaining it. It is influenced by prevailing market conditions. Each bank who offers board rate has their own determined rate and can change the reference rates at its sole discretion. The annual interest rate is calculated by usually deducting a discount rate from the board rate. Discount rate does not change. What will cause your interest rate to moves, is the board rate. Usually, bank will give a 30 days notice if they increase the rate. It typically lags behind interbank rate movements ie SIBOR or SOR, thus it is relatively less volatile. It is not entirely transparent given that it is proprietary to the bank. It continues to remain popular after the introduction of SIBOR and SOR mortgages. Some banks allow flexibility to do partial redemption.
E) Fixed Deposit-linked- DBS pioneered loan products that track fixed deposit rates in early 2014. FHR, which stands for Fixed Home Rates, is a benchmark rate that was the average of 12-months Fixed Deposit rate and 24-months Fixed Deposit rate. It is the first time, that any bank in Singapore is using a saving rate than a lending rate to peg housing loan packages! A premium, or we call it a spread, is added to the Fixed Deposit rate to calculate the effective interest rate. This product was very popular as everyone thinks savings rate is historically lower than lending rate in Singapore. Then FHR was enhanced to FHR18, which is the 18-months Fixed Deposit Rates. This occured in late 2015. In 2016, competitors of DBS also launched similar products too. UOB created loan products that tracks savings rate, known as Fixed Deposit Property Rate (FDPR), Standard Chartered called it Fixed Deposit Rates (FDR), OCBC version is Fixed Deposit Mortgage Rates (FDMR). Many variations were introduced since 2014 while some were retired by the banks. Some fixed deposit rates have risen too, affecting the mortgages linked to these rates.