Housing Loan Singapore | Mortgage Home Loan

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Bank of China housing loan

Bank of China home loan interest rates

Bank of China was founded in 1912 by the Government of the Republic of China, to replace the Government Bank of Imperial China. It is the oldest bank in China in service today. From its establishment until 1942, it was one of the authorised institutions to issue banknotes on behalf of the Chinese Government, and initially functioning as the central bank of China. Since 1928, the BOC became a purely commercial bank with its headquarters now in Beijing. As of 2009, BOC is the 5th largest bank in the world by market capitalization value. Locally, it holds over 70 years of experience serving the Singapore community. While it does have a personal banking segment, its core business remains to be in the corporate banking sector, providing expertise and specialising in China-related trade financing and settlements, and remittance services.

The mortgage loans from Bank of China are applicable for private properties as well as HDB and Executive Condominiums. The packages are based on 3 month Sibor or 3 month SOR rate and a special characteristic of their variable rate packages is that they offer the flexibility to switch between SOR and Sibor rates without any charges for the home owner.

While most of us are already familiar with the Sibor rate, you may want to know more about the SOR rate as it is also a popular benchmark rate that banks here use. SOR represents the Swap offer rate, which is fixed by the Association of Banks in Singapore. It represents the average cost of funds used by banks in Singapore for commercial lending. There are usually a few different SIBOR and SOR options available. You have 1 month, 3 month, 6 month, 9 month and 12 month SIBOR and SOR Rates respectively. Generally, longer term rates are higher than the shorter term rates but are less volatile. Some borrowers may prefer this option as it gives them more certainty to the rates and allow them to plan out their finance in a more predictable manner. For instance, 1 month SIBOR could be at 0.4%, and 12 month SIBOR could be at 1.2%. The best option between stability and lower rates is perhaps the 3-month SIBOR or 3-month SOR option.

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

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ANZ housing loan

ANZ home loan interest rates

The Australia and New Zealand Banking Group Limited (ANZ) is the third largest bank by market capitalization in Australia and the largest bank in New Zealand. The Australian operations make up the largest part of ANZ’s business, with a focus on commercial and retail banking. In addition to operations throughout Australia and New Zealand, ANZ also provides its banking services in 32 other countries. The banking giant opened a representative office in Singapore in 1974 and was subsequently upgraded to a wholesale bank in 2002. ANZ Singapore is one of two designated ANZ regional hubs in Asia which can provide integrated banking services across institutional and corporate banking, financial markets, trade finance, corporate finance, retail banking, private banking and investment banking services. As of September 2010, ANZ has a total asset of AU$531.74 billion.

ANZ is the only bank to offer a combined SIBOR / SOR package for home loans. This means that interest rates are based on the average of both SIBOR and SOR + a set percentage. This approach offers some moderation of volatility should one of the rates surged, and also helping to cap the risk for people who are undecided between SIBOR or SOR. To give you an idea of their SIBOR-SOR combination loans, we picked one that is eligible for HDB owners and you can even choose between either a fixed or variable rate. For fixed rate, you will need to pay an interest of 1.35% for 2 years, before being allowed to switch to the 3 month Sibor-SOR combo. If you prefer variable rates, you can pick the one which offers at (3 month Sibor-SOR combo + 1%) from the start.

Being an Australian bank, ANZ also offers Australian Property Loans, making it easier and more convenient for ANZ Signature Priority Banking customers to purchase or refinance their Australian residential property for owner occupation or investment purposes. Some key advantages of this loan is that there could be Interest rate savings compared to domestic Australian rates, waiver of annual administrative fees and the flexibility to partially or fully repay your loan on interest revision dates. The requirement states you need to be Singaporean citizen and permanent residents or foreigner who is residing and working in and outside of Singapore, and are permitted to purchase properties in Australia. The minimum loan for this is 300,000 AUD and the loan currency will be in AUD.

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

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Home Loan Structure

Home Loan Structure

Home Loan also known as housing loan (or mortgage) is the process of getting a loan from a bank by pledging the property as collateral to the bank. The title deed of the property will be safe held by the bank. Upon fully paid on the home loan, the title deed will then be return to the owner.

Loan Structure – 1st home loan
1st 5% = Cash only
2nd 15% = Cash or CPF
Remaining 80% = Cash or CPF or Home loan

Loan Structure – 2nd home loan and onwards
1st 10% = Cash only
2nd 30% = Cash or CPF
Remaining 60% = Cash or CPF or Home loan

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Fire, Home, Mortgage Insurance

Fire insurance vs Home content insurance vs Mortgage insurance

When a customer took up a home loan from the bank, he will be entitled to 1st year free fire insurance. For this free fire insurance, what does it cover?

Generally, it only covers the structure of the property. This means that if your property structure is severely damage (non livable condition) then you are able to claim up to the current valuation of the property. The claim rate for this kind of insurance in extremely low as Singapore is a very safe country with no nature disaster or terror attack that will eventually destroy the structure. Take note that some fire insurance exclude natural disaster claim.

Some banks are being more generous. Beside the fire insurance, they also provide home content insurance for their customers. Home content insurance will pay for the damage or loss of customers’ possessions located within the house. Usually the coverage for home content insurance is from 5k to 10k.

Mortgage insurance covers the life of the insured. Should the insured suffer from death or totally disabled, the outstanding home loan will be fully paid off of the insurance company. If the home loan is taken up by 2 people, Mortgage insurance allows coverage of both applicants.

Advantage of Mortgage Insurance

  • Affordable premium for the coverage of both life (generally the premium is more affordable compare to term or life plan)
  • If death occurs to either insured, the payout (outstanding loan amount) will be paid to the joint insured (he/she can choose to keep or pay off the outstanding home loan)
  • This insurance coverage is portable – this means if you ever do a refinancing to another bank, the coverage will not be affected.
  • Flexibility to terminate anytime
  • Usually the last few years of the premium is free

Disadvantage of Mortgage Insurance

  • Reducing coverage – as the objective of the mortgage insurance if to cover the outstanding home loan, the coverage is on a reducing term.
  • Only 1 claim – should both insured suffer from death, only 1 claim of the total outstanding loan is allow.
  • No cash value – the insured is mainly paying for the protection. At the end of the policy, the insured does not get back any cash from the insurance company.

This article is for reference only. You should always check with your banker or insurance agent regarding the type of insurance that is more suitable for you.

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Equity loan, Term Loan, Cashout

What is Equity Loan, Term Loan or Cashout?

Equity Loan is also known as term loan or cashout. Client pledge the property to the bank or financial institution to get cash for personal use. The loan amount available is much more than taking a personal loan as the property acts as collateral to the bank. Since there is collateral, the bank view this type of loan as lower risk, thus, interest rate is much lower compare to personal loan. Usually the interest charged is the same as home loan. Equity loan can be taken up together with home loan.

Generally the bank uses the following formula to calculate equity loan:

70% (or 75%) x property valuation – total outstanding loan – total CPF used and accrued interest = Total equity loan available

Case study:
Mr Tan bought a property of 1m 5 years ago and took a loan of 800k.
5 years later, property appreciates to 1.5m.
Total loan outstanding remaining is 700k
Total CPF used and accrued interest = 100k

Total equity loan available = 70% (or 75%) x property valuation – total outstanding loan – total CPF used and accrued interest

Total equity loan available = 70% x 1.5m – 700k – 100k = $250k