Last Modified On 15 Jan, 2021
9 Benefits Of OCBC Home Loan
Overseas-Chinese Banking Corporation (OCBC) is one of the Big 3 banks in Singapore formed after mergers in 1932, with headquarter in Singapore. It claims a position of the second largest financial services group in Southeast Asia by assets, with key markets in Singapore, Malaysia, Indonesia, and Greater China, and has achieved an Aa1 rating from Moody’s consistently.
For mortgage business in Singapore, OCBC’s tagline is “Different loans for different homes” and it offers the full suite of mortgage solutions – both fixed rate home loans and floating rate home loans pegged to BOARD as well as SIBOR packages. For the latter, it promotes in particular the 3-month and 6-month SIBOR for its ease of servicing with a fixed repayment every month which resets only every 3 or 6 month. We summarised the rates in the chart below.
Apart from Singapore residential property financing, we also broker OCBC’s property financing packages for:
- Commercial property under personal name
- Commercial property under company name
- Australia property financing (primarily for preferred customers)
- London property financing (primarily for preferred customers)
Before we go on, you may check all the latest rates from the market here:
OCBC Home Loan Packages
For Completed Residential Property
(Rates may change from time to time, check latest home loan rates)
|3M SIBOR||3M SORA (Compounded)||BOARD|
|Lock-in||2 years||2 years||3 years|
|Year 1||3M SIBOR + 0.80||3M SORA + 1.20||1.30 (Fixed)|
|Year 2||3M SIBOR + 0.80||3M SORA + 1.20||1.30 (Fixed)|
|Year 3||3M SIBOR + 1.00||3M SORA + 1.20||1.30 (Fixed)|
|Year 4||3M SIBOR + 1.00||3M SORA + 1.40||1.80|
|Year 5 (thereafter)||3M SIBOR + 1.00||3M SORA + 1.40||1.80|
|Minimum Loan||$400k/800k for hdb/pte||$300,000||$350k/700k for hdb/pte|
|Cash Rebate||>$500k: $2,000|
>$300k: $1,800 (for hdb)
>$300k: $1,800 (for hdb)
>$300k: $1,800 (for hdb)
NOTE: There are “deviated rates” for OCBC fixed rate home loans lower than what you see here but which we are unable to publish. Contact us for details or apply here.
How does one choose between the 3 local banks whom most are familiar with in Singapore? In our view, there is good reason to use all 3 local banks at one point or another, as their loan features are different and may work for us at different points of holding the property or at different points in the interest rate cycle. Most importantly, one usually will not get the best rates by staying with the same bank.
It simply does not pay to be loyal these days, and this applies beyond mortgages but everything else as companies generally give away more to acquire a new customer than to retain an existing one. If you concur with this view point, consider the advantages of working with a trusted mortgage broker long-term, as many have already discovered.
As professional mortgage consultants, we will highlight and summarize some of the key benefits of applying for OCBC home loans which may not be all that apparent to many, be it for new purchase or refinancing.
Why OCBC Home Loans? 9 Benefits..
|Fast approval||Just like the other two local banks, there is fast-track or “instant approval” for homeowners with good credit rating and verifiable income. Approval can be granted as quickly as within 2 days, or in some cases, within the same day! So long all documents are complete.|
|Cash rebate||For refinancing of home loans, OCBC offers cash rebate and not legal subsidy. This means the law firm will bill the homeowner who could then opt to pay the refinancing legal fee of $1,800 all-in taxes (special rate from our partner law firms for private property) from their CPF. OCBC will later credit the cash rebate of $2,000 into the applicant’s OCBC account. Which means there will be an excess of $200, unlike in the case of legal subsidy where the law firm will bill the bank and be paid the exact amount of $1,800.|
|Waiver fire insurance||OCBC waives the need for homeowner to purchase a mandatory fire insurance policy from a bank-appointed insurance company, as stipulated in most mortgage contracts. This translates into a savings per year of approximately $100-200 (annual premium payable) for most condo sizes. This waiver only applies to private condominiums and ECs, but not for landed or HDB properties.|
For strata-titled developments, the MCST of the condo would have in place a Group fire insurance policy which covers every single unit in the condo.
|Free conversion||Free conversion simply means the option of calling up the bank to switch to another prevailing package, without being slapped with the usual conversion fee of around $500 for local banks. |
Free conversions are typically offered at the end of the lock-in period. This acts as an incentive for homeowners to sign up for a home loan where the spreads or interest rate go up after the lock-in ends, which is usually the case.
However, OCBC does offer free conversion even during the lock-in period for its floating rate home loans pegged to BOARD if the bank should revise the BOARD rate up while the homeowner is still locked in. This acts as a safety net for those who are not too comfortable pegging to a BOARD rate which is less transparent than SIBOR.
|Prepayment 50%||For its floating rate home loans on either SIBOR or BOARD, OCBC allows a prepayment of up to 50% of the outstanding loan balance during the lock-in period, without any redemption penalty. This has become an important feature in recent years with rising rates as homeowners seek to pay down their liabilities earlier.|
|Waiver due to sale||For this benefit, there are variations depending on the packages offered which may change from time to time.|
In general, for floating rate home loans only, OCBC offers a 50% waiver of the lock-in penalty (typically 1.50% of the loan redeemed) if the redemption during the lock-in period is due to a sale of the property. This means that upon showing proof of sale, homeowners will be asked to pay only 0.75% of outstanding loan amount redeemed. Further, if he or she takes back another OCBC home loan of an equivalent or higher amount within 6 months, this penalty paid of 0.75% will be fully refunded.
|Low valuation fee||Unknown to many, OCBC has revised its valuation cost scale down for all condos up to $2m:|
Valuation <$1m : $315
Valuation $1m-$2m: $400
|No change in spreads||After one bank revised the contracted spreads up unilaterally back in Apr 2015 by serving a notification letter to its customer base leading to much unhappiness and complaints, MAS has mandated that all lenders present a “MAS Fact Sheet” to all borrowers before signing of the loan offer contract.|
For SIBOR home loans, OCBC remains the few bank that represents clearly in this factsheet, that it will not alter the spreads of the home loan, neither in the first 3 years of the loan tenure nor thereafter.
|One-page application form||OCBC has a simple 1-page loan application form that is entitled Evaluation form, which makes it a breeze to apply in just 5 minutes!|
To understand more about Singapore home loan features from up to 12 major mortgage lenders, speak to our experienced team of mortgage consultants today!
Find out as well how you get additional $150 valuation fee offset when you refinance home loan through us instead of applying direct to the bank – essentially for the same interest rate package. Or if you are looking to buy Singapore condo, enjoy a special purchase legal of $1,800 (all-in taxes) for completed property, from our partner law firm. Both benefits subject to a minimum loan of $500,000 through us.