Feeling tight on monthly repayments? Fret not, Mortgage Choice allows you to pay only a portion of the principal. If you wish to maximize cash flow from your property (especially the investment one), look no further and please continue to read about Mortgage Choice!
*This loan product is discontinued. You can do a comparision of the latest home loan products.
What is Mortgage Choice
Mortgage Choice offers a repayment scheme that allows you to pay interest and only a portion of principal. This package is very attractive for investors especially if you are planning to rent out the unit and have the rental income offset your installment substantially. Chances are, you will have a positive cash flow every month from this Mortgage Choice. Mortgage Choice helps you with your cash flow, so that you can own a house and have more cash in hand.
Mortgage Choice is a new Home Loan repayment feature allowing you to choose a fixed monthly installment for up to 2 years to ease cash flow.
Options
- Fixed installment amount of your choice for duration of your choice – either 1 or 2 years (after TOP).
- Your choice to opt-out at any time to resume regular instalment.
- Choice of 3M SIBORonwards or Variable Rate onwards.
Improving Cash Flow
- Cash flow is eased in the initial years so that you can channel to other commitments.
- Conserve CPF funds in Ordinary Account to earn higher interest or use CPF funds for other investments. (for Singaporeans & SPRs only)
Ease of Payment
- No hassle of making capital repayment
- For SIBOR packages, you enjoy fixed installments every 3 months
In order to have some element of stability in the monthly instalment payable for the next couple of years, the customer can take up the Mortgage Choice package which allows the customer to lower the monthly instalment payable. This will allow the customer to enjoy the benefits of the current low interest rates as well as the stability offered by a fixed monthly payment.
Case Study (all figures are for illustration purposes)
So let’s say you are taking up a loan quantum of $1,000,000 for 30 years. The normal interest rates are at 1.08% year 1 and 1.18% year 2. Let’s see how the savings compare between a typical home loan product and Mortgage Choice with fixed monthly installment for 2 years.
The normal monthly installments are $3,254 for year 1 while it’s only $2,300 for Mortgage Choice. Your savings is a significant $11,439 in year 1 while the unutilized CPF funds earned you some interests in OA. The potential savings over 2 years is more than $23,000. Now do you think this is worth your time considering and talking to the banker on maximizing your property rental cashflow and reducing monthly outlay?
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Offered by OCBC, Mortgage Choice is worth a look if you intend to improve cashflow and defer monthly principal repayments. Here’s a sample loan package that you may obtain.
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