HDB Loan Or Bank Loan?
That is the common question. What do you look at? Then there is also the new mortgage servicing ratio which affects a great majority of borrowers in today’s market. Understand how it works. Talk to us today.
Once you have decided on a HDB bank loan, the next step is to decide if you like floating rate or fixed rate HDB bank loan.
For floating rate it is usually pegged to money market rates Sibor or Sor plus a small markup called a spread. or it can also be pegged to the bank’s internal board rate minus a certain margin. Either way. the spread forms the profit for the bank. The bank usually lowers this spread to give promotional rates for the initial 3-4 years of the loan tenure so as to attract new customers but begins to raise it afterwards. Hence most borrowers tend to refinance their mortgage after the 1st 3 years which is why we look closely at the average rate in the 1st 3 years of the package.
The HDB variable rate home loan packages below are sorted in order of lowest average rate in the 1st 3 years.
The SIBOR & SOR rates are based on rates published on Association of Banks In Singapore (ABS)’s website on the 1st business Monday of the month. See the weekly money market rates at bottom of home page.
– Combo rate is average of 3M Sibor & 3M Sor rate
– FD is the bank’s Fixed Deposit rate