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Best Home Loan Rates

 In Home Loan

Home loan rates in Singapore

Buying your first residential property could be very exciting but at the same time, the calculations and analysis are a crucial part of the process. It involves a high amount of money and probably the biggest decision for you. In Singapore, home loans are provided for different properties; HDB flats, private properties, refinancing, and under-construction properties.

Different types of residential properties have different legal requirements and processes. For HDB flats, the valuation is done after the offer to purchase. And for private property, the valuation is done before an offer to purchase. 

Home loan features:

Lock-in period

Banks in Singapore generally offer a lock-in period of 2-3 years during which the interest rate is fixed and also the monthly installments. This helps you to plan out your monthly budget for your home loan.

Legal subsidies

Loan packages offered by the banks sometimes include legal subsidies and cash rebates that totally depend upon the loan amount.

Loan conversion

On-time free conversion features provided by some banks also help you avail the benefit of low-interest rates offered by some other bank/package.

Penalty waiver for partial payment

Certain banks also waive off the penalty fee for partial payment of home loans during the lock-in period.

Penalty waiver for property sale

This feature allows the borrower to sell their property during the lock-in period without paying any penalty fees.

Interest offset

Borrowers link their housing loan servicing account to their deposit account in order to earn a deposit rate ranging 50-70% of your housing loan rate. Interest earned is then used to reduce the principal amount faster. And this feature is only offered by HSBC, Standard Chartered Bank, and HSBC.

Factors affecting the home loan rates

Closing costs

Closing costs are normally a payment made to the bank for lending the loan. However, there is an option to include this amount in your total costs. In case you prefer your bank to pay this cost, the interest rate goes up.

Down payment 

The initial amount paid against the property purchase is the down payment. Higher the down payment, lower your rate of interest on the home loan.

Credit score

While calculating the term of your home loan, FICO score is used which is based on two things; your credit rating and your income level. To enjoy a lower interest rate, your income level has to be high and your credit score excellent. 

Loan term

The term of the loan directly affects your interest rate. The shorter loan term always have a higher interest rate.

Best home loan rates in Singapore

Best fixed home loan rates for HDB flat

Best fixed home loan rates for HDB flat

 

Best floating home loan rate for HDB flat

Best floating home loan rate for HDB flat

 

Best fixed home loan rate for private properties

Best fixed home loan rate for private properties

 

Best floating home loan rate for private properties

Best floating home loan rate for private properties

 

Best home loan rate for refinancing

Best home loan rate for refinancing

 

Best home loan rate for under-construction properties

Best home loan rate for under-construction properties

 

Best 5 year fixed home loan rate

Fixed 5 year home loan rate is only for HDB flats. This applies to both a new property and refinancing of HDB flats. 

The minimum amount of loan is S$20,000 and comes with one free conversion after 60 months from the date of the first disbursement. The interest rate with a lock-in period of 5 years is 1.40% p.a for the first 5 years and after that, it is 1.60% p.a + FHR6.

wayne quek
Wayne is a Chartered Financial Analyst (CFA), and holds a Bachelor of Business Management (Finance) from Singapore Management University (SMU). A successful Relationship Manager during his time with DBS and HSBC, Wayne used his expertise in financial markets to help his clients build up comprehensive investment portfolios. The entrepreneur is also the founder of Home Loan Whiz, a mortgage consulting firm that assists clients with selecting ideal mortgages for their needs.
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