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March 13, 2015 By admin

More homeowners who took housing loans from banks are now looking for refinancing options after the recent spike in SIBOR

More homeowners who took housing loans from banks are now looking for refinancing options. Loan specialists said they have been getting more inquiries since the recent spike in SIBOR (Singapore Interbank Offered Rate).

Homeowners – whose mortgages are tied to SIBOR – are now facing higher monthly payments. One of those affected is 30-year-old engineer Lai Ming Kwan, who bought an executive condominium with his wife two years ago and he opted for a bank loan that is tied to SIBOR.

With the benchmark rising sharply in recent days, Mr Lai is concerned about how it will affect him. He said: “They predicted that it will stay at 0.3 per cent to 0.4 per cent for a few years. I did not expect it would go up to so high … SIBOR is increasing so fast that my pay cannot catch up with the financing rates.”

Both Mr Lai and his wife are working and have a 16-month-old child. “Expenses, lifestyles will have to change a bit because I have to save up more to contribute to the housing loan … so there’ll definitely be an impact, maybe less shopping. With the child coming up, there is also school fees, childcare fees, so the depletion will come from my savings. Having a second child will also mean more expenses,” he added.

Some homeowners, like Mr Lai, cannot look into other financing options yet because their loan deal has a lock-in period, which requires them to stick to the same bank for a couple of years. However, loan specialists said that those whose lock-in periods are up are already starting to look at refinancing options. This can include looking for a housing loan with fixed interest rates instead of being tied to one with variable rates.

One mortgage consultancy said that it has received many inquiries on refinancing in recent days, about 30 per cent more when compared to last year. Mr Sean Lim, the mortgage consultant head at iMoney, said: “They want to know what is happening in the market … So they are taking time to digest and understand what is happening in the market.

“The pace of increment did catch me by surprise. But it is also half-expected. The trend has been going up slowly over the last six months. Looking at the market trend, it will continue to go up.”

With interest rates rising, banks can be expected to review their mortgage rates and plans. Analysts said that potential home buyers or those who are hoping to refinance their housing loans should choose a package that best suits their financial needs.

Source: http://www.channelnewsasia.com/news/singapore/more-homeowners-look-to/1575034.html

Filed Under: Latest News

April 9, 2014 By admin

Housing Loan Packages

Home Loan Packages

5 years historical Sibor/SOR chart
5 years historical Sibor/SOR chart

Sibor/ SOR Rate Mortgage

Sibor stands for the Singapore Interbank Offered Rate.

Sibor Singapore is the rate at which banks lend to one another in SGD. When it falls, so does the mortgage rate of Sibor-linked Mortgages.
Sibor also gives a rough indication on where deposit and savings account rate at banks might be heading as it is influenced partly by the supply and demand for funds in the Singapore interbank market.

SOR stands for Swap Offer Rate.

SOR rate represents the cost of borrowing SGD synthetically through borrowing USD and swap out in return for SGD for the same tenor.

Sibor/ SOR rate are available at 1month, 3months, 6 months, 9 months and 12 months and is published in The Business Times.
Sibor/ SOR rate are usually stated as 3m Sibor + x%, or 12m SOR + x%.

Advantage
Transparency as Sibor/ SOR rates are made known to the public (rates can be readily obtained through The Business Times).
Generally does not come with any lock in period.

Disadvantage
Uncertainty as rate is adjusted based on market conditions.

More information of Sibor and SOR can be found at Sibor vs SOR Home Loan

Fixed Rate Mortgage

Banks/ financial institutions will state upfront the fixed interest rate for a number of years.
The fixed rate is usually 1-3 years, followed by a floating rate.

Advantage
Simple and straight forward.
Worry-free as it is not affected by the market conditions.

Disadvantage
Interest rate is usually higher compared to a floating rate mortgage.
Generally, it comes with a lock-in period (Eg. 2 years fixed rate = 2 years lock in period).

Floating Rate Mortgage

Interest rate varies and is adjusted based on the banks/ financial institutions discretion.
It is usually stated as Mortgage Board Rate – x% = floating rate.

Advantage
Interest rate is usually lower than fixed rate.

Disadvantage
There is uncertainty as the rate is adjusted based on banks/financial institutions discretion.

Cash Rebate Mortgage

Upon signing up on the mortgage loan, the banks/financial institutions will provide you with a cash rebate.
The rebate is usually 1.5% of the mortgage loan amount and it comes with a 3 years claw back condition.

Advantage
Cash rebate upfront to pay for your existing home loan penalty.

Disadvantage
Generally, there will be an additional interest loading to your mortgage loan.
Comes with a 3 years claw back condition on the cash rebate amount..

Interest Offset Mortgage

This mortgage loan comes with a repayment account which earns you interest.
The interest earned will help to reduce the outstanding principal balance on your mortgage.
The more cash you have in your repayment account, the faster you reduce your mortgage principal balance and the lesser the interest you pay to the bank.
This mortgage loan targets cash rich client who wants liquidity.

Advantage
Liquidity.
Interest rate is lower if you are able to ‘park’ your cash in the repayment account.

Disadvantage
Interest rate is usually a floating rate which creates uncertainty.
The base interest rate is usually higher due to the unique features of this loan.

Interest Only Mortgage

This mortgage loan allows you to service only the interest portion.
The interest servicing period is usually for the first 1 or 2 years and will revert back to the original package.

Advantage
Low monthly instalment as the client only services the interest portion.

Disadvantage
During the interest servicing period, you principal is not reduced by a single cent.

Equity Loan/ Term Loan (Cashout)

Client can pledge their property with the banks/financial institutions to get cash.
It is possible to take a equity loan together with a Mortgage loan.

Advantage
Able to borrow a much larger amount compared to a personal loan.
Interest rate is charged as per mortgage loan interest rate which is much lower as compared to a personal loan.

Disadvantage
Only applicable to Private Property.

Filed Under: Guide

April 8, 2014 By admin

UOB housing loan

UOB home loan interest rates

United Overseas Bank Limited is a household name in Singapore, a banking organisation headquartered locally with branches mostly found in most South-east Asian countries. It was founded in 1935 by Sarawak businessman Wee Khiang Cheng. Besides Far Eastern Bank in Singapore, UOB’s major banking subsidiaries in the region are United Overseas Bank (Malaysia), United Overseas Bank (Thai), PT Bank UOB Indonesia and United Overseas Bank (China).  The bank now has close to 70 branches in Singapore and a network of more than 500 offices in 19 countries and territories.

UOB provides a wide range of financial services through its global network of branches and subsidiaries including personal financial services, private banking, commercial and corporate banking, investment banking, corporate finance, capital market activities and stockbroking services. In Singapore, UOB is a market leader in the credit card segment and residential home loan businesses. It is also a key player in loans to small and medium enterprises. In 2011 UOB was named the Best Retail Bank in Singapore and the Best SME Banking Business in The Asian Banker’s 10th International Excellence in Retail Financial Services Awards Programme. UOB is rated among the world’s top banks, with a rating of Aa1 from Moody’s and AA- from Standard & Poor’s respectively.

UOB provides quite a comprehensive suite of home loans ranging from private home loans, HDB home loans, home equity financing, construction loan and international home loan. To give an idea of their interest rates on home loans, indicative fixed rates are at 1.48% interest for private home loan for the first year, and 1.78% for the second year. Floating rates based on 3 month Sibor typically adds an additional 1.05% to 1.25% on top of the Sibor rates.

For those that are interested, UOB also has a plan call the UOB Home plus, which is a home loan that pays interest on your deposits with the bank. According to UOB’s website, UOB Home Plus offers a competitive interest rate that pays the same amount and pays the same rate as your deposit account.

As leading Singapore mortgage brokers, let us get you the lowest mortgage packages for:

  • Housing Loan Singapore
  • Refinance Home Loan

Filed Under: Banks

April 8, 2014 By admin

State Bank of India housing loan

State Bank of India home loan interest rates

The State Bank of India is a fortune 500 company and the largest commercial bank in India, with the Indian government as their largest shareholder. It has over 200 years of history and has an extensive network covering operations in 32 countries with over 15,000 branches. As of 31st March 2012, the group had assets worth USD 359 billion, deposits of USD 278 billion and capital & reserves in excess of USD 20.88 billion. The group commands over 22% share of the domestic Indian banking market.SBI is ranked 60th in the list of Top 1000 Banks in the world by “The Banker” in July 2012.

Their Singapore operations was set up in 1977 with offshore banking license and only granted Full Bank status with QFB privileges in 2008. The bank now has 7 retail branches, 24 SBI ATMs and over 130 ATMs in Singapore. SBI Singapore now offers a suite of retail banking products which also enhances its existing corporate banking products. One of their star services is the instant transfer facility for INR remittances. In the retail sector, the State Bank of India also offers savings accounts, term deposits, recurring deports and retail loans.

SBI offers homes loans for both HDB and private properties with options of Sibor-pegged floating rates or fixed rates for more stability. Lock-in periods are dependent on the schemes or promotion available and home owners will be glad to know there are no processing fees as well.  For refinancing and equity loans, SBI also offers subsidies on legal fees, insurance and valuation services. If you are looking to move into your new home before selling away your previous property, you may also make use of SBI’s bridging loan. You will only need to service the interest during the repayment period and the loan can be repaid once you receive the sales proceeds.

As leading Singapore mortgage brokers, let us get you the lowest mortgage packages for:

  • Housing Loan Singapore
  • Refinance Home Loan

Filed Under: Banks

April 8, 2014 By admin

Standard Chartered housing loan

Standard Chartered home loan interest rates

Standard Chartered PLC is a British banking and financial services company headquartered in London. It operates a network of over 1,700 branches and outlets in more than 70 countries and employs around 87,000 people. It is a bank with worldwide operations in consumer, corporate and institutional banking services. Standard Chartered has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. It had a market capitalisation of approximately £33 billion as of December 2011. It has secondary listings on the Hong Kong Stock Exchange and the National Stock Exchange of India. Many Singaporeans may also not know that its largest shareholder is theSingapore government-owned Temasek Holdings.

Standard Chartered won Global Finance’s award for Singapore’s Best Consumer Internet Bank 2011. Their customers are able to apply for credit cards at a click of the button and their innovative online banking system also allows customers to make payments for visa or mastercard bills from any banks through their system. Let us know take a detailed look at their suite of home loan products:

A)   Home Suite

The Home Suite package embodies a slew of home solutions bundled together to provide the customer with a convenient experience. It comes with a home loan, current account with debit card and access to Standard Chartered’s internet and mobile banking platforms. The Home suite provides the home owner with 3 types of home loans to choose from: Fixed rates, Sibor-pegged and the MortgageOne Sibor. It provides one month Sibor-pegged rates at an indicative 1.36% after adding a 1.05% on top of Sibor rates.

 B)   MortgageOne Sibor

The MortgageOne Sibor is designed to encourage the cash-rich home owner to make use of the bank’s facilities to optimise this interest rates payment on his home loans. It is designed to be a one-stop shop that puts your savings, salary, current and mortgage accounts all under one roof for more efficient money management. It works like this: You can deposit any amount of money into the MortgageOne SIBOR account as there is no maximum interest that can be enjoyed on your deposits. You will also be able to benefit from the same rates as your mortgage loan on 2/3 of your deposits, subject to a maximum of your loan principal outstanding. Your remaining deposits will enjoy an interest rate of 0.25% p.a. The total interest on your deposits will then go towards repaying the interest liability on your mortgage loan and any extra will help in reducing your loan principal outstanding. The interest rates are based on the 3 month Sibor+margin from the bank and the loan size will be on a minimum of SGD 200,000.

C)   HDB Home Suite

As we have seen from above, Standard Chartered likes to provide their financial products as a ‘solution’ by packaging a series of products together for the convenience of their customers and the HDB Home Suite is no different. This all-in-one HDB home solutions package comes with a HDB Home loan, insurance protection, current account, home renovation loan, credit card and access to online and mobile banking. For the HDB home loan, you can choose either Fixed or SIBOR-pegged interest rates and up to 80% financing is available from the bank.

As leading Singapore mortgage brokers, let us get you the lowest mortgage packages for:

  • Housing Loan Singapore
  • Refinance Home Loan

Filed Under: Banks

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