board rate or sibor rate

Review Of FDR Interest Hikes In 2018

With the spate of increases in fixed deposit rates in Singapore last year leading to higher mortgage repayments for many homeowners who have chosen to peg their home loan rate to FDR (fixed deposit rate) mortgge pegs from the various banks, I thought it would be timely to take stock as we begin another year.

Compare All Latest Rates 2018

First, a recap of what is FDR (fixed deposit rate) home loans?  DBS pioneered this unique mortgage peg back in June 2014 when it started pegging the interest rate it charges for its home loans to a pre-designated fixed deposit rate tenure (eg.12-month, 18-month, 24-month) of deposits between $1,000-9,999 published on its website and called it FHR (fixed deposit home rate).  It gained traction in the market after a year and more banks followed suit with their own versions going by different names from FDMR (OCBC & Maybank), FDPR (UOB), FDR (SCB) to TDMR (HSBC).  At MortgageWise, we refer to these collectively as FDR home loans and track their movements closely over the years (see our chart).  However, with rising cost of funds, a few banks (OCBC, UOB, Maybank) have pulled the plug on FDRs and replaced them with traditional BOARD rates since 2018.  Curently only three banks still offer FDR home loans in the market: DBS, SCB and HSBC.

Now let us take a look at the many rounds of adjustments to FDR pegs by banks 2018 (in chronological order):

BankMortgage PegOld RateNew RateIncrease ByEffective Date
DBSFHR180.600.800.201 Feb
SCB48FDR0.500.900.406 Feb
MYBFDMR361.201.400.2010 Feb
OCBC15FDMR
48FDMR
0.25
0.95
0.55
1.25
0.30
0.30
1 Mar
UOB36FDPR0.651.000.355 Mar
DBSFHR90.250.500.259 May
FHR
(ave 12/24M)
0.675
0.35(12M)
1.00 (24M)
0.80
0.60(12M)
1.00 (24)
0.1259 May
MYBFDMR361.401.800.4026 Jun
OCBC36FDMR0.650.950.302 Aug
OHR1.001.300.3016 Aug
UOB15FDPR0.250.700.4527 Jul
14FDPR0.250.600.3527 Jul
DBSFHR80.200.500.3024 Aug
FHR90.500.800.3024 Aug
FHR
(ave 12/24M)
0.80
0.60 (12M)
1.00 (24M)
0.975
0.80 (12M)
1.15 (24M)
0.17524 Aug
FHR180.800.950.1524 Aug
SCB48FDR0.901.100.208 Nov
9FDR0.300.650.358 Nov
36FDR0.720.970.258 Nov
DBSFHR
(ave 12/24M)
0.975
0.80 (12M)
1.15 (24M)
1.075
0.95 (12M)
1.20 (24M)
0.1013 Dec
FHR180.951.100.1513 Dec
FHR90.800.950.1513 Dec
FHR80.500.6750.17513 Dec
OCBC15FDMR0.551.250.7016 Jan 2019
36FDMR0.951.550.6016 Jan 2019
48FDMR1.251.750.5016 Jan 2019
OHR1.301.80-2.000.50-0.7016 Jan 2019
MBR(Mortgage Board Rate)0.801.20-1.300.40-0.5016 Jan 2019

Compare All Latest Rates 2018

Note we included the latest hike for OCBC as part of 2018 review as it was announced back in December even though it took effect only in 2019 (this week).  For 2018, we also included OCBC’s OHR and MBR which are essentially BOARD rates, not FDR mortgage pegs.  However, going forward we will not be able to track them as they are of BOARD nature –not in the public domain or published anywhere on the bank’s website, and over time the bank could adjust the value of BOARD for different batches of loans depending on which periods these were signed and hence it is no longer of a singular value, unlike FDR peg.

With the many round of increases, it is easy to lose track of the total increases in the year for each FDR tranche so we summarize them below indicating the value at the start and end of the year (including HSBC which make no adjustment in 2018):

BankMortgage PegValue 1 JanValue 31 DecTotal Increase 2018
DBSFHR
(ave 12/24M)
0.675
0.35(12M)
1.00 (24M)
1.075
0.95 (12M)
1.20 (24M)
0.40
FHR180.601.100.50
FHR90.250.950.70
FHR80.200.6750.475
OCBC15FDMR0.251.251.00
36FDMR0.651.550.90
48FDMR0.951.750.80
OHR1.001.80-2.000.80-1.00
MBR(Mortgage Board Rate)0.801.20-1.300.40-0.50
UOB36FDPR0.651.000.35
15FDPR0.250.700.45
14FDPR0.250.600.35
MYBFDMR361.201.800.60
SCB48FDR0.501.100.60
9FDR0.300.650.35
36FDR0.720.970.25
HSBCTDMR240.650.650.00

The value in bold represents the current value of the mortgage peg.  The increases in the year fluctuates widely from 0.25% to 1.00% so it is hard to draw an average.  The only bank which never adjusted its FDR peg was HSBC with its TDMR24 launched to the market back in Dec 2017.  This means that those lucky few who signed onto HSBC floating rate packages earlier would still be paying around 1.65-1.78% today, even going into the 2ndyear of their loan tenure.  We do however expect one hike from the bank this year in 2019.

Compare All Latest Rates 2018

To put in perspective, the benchmark 3-month SIBOR has also moved up in 2018 following four rate hikes from the US Federal Reserve to end the year at 1.886%. It seems the banks moved quite quickly on FDRs to level up with the general rise in benchmark lending rates.

Does FDR home loans still make sense?  That depends.  There are couple of factors to weigh in like the outstanding loan amount, pace of interest rate increases going forward, intention of sale of property or to do partial prepayment, etc.  Speak to our team of very experienced mortgage consultants who have assisted thousands of happy clients make that right choice on the type of home loan to refinance to and why.

After all we are the few, or quite possibly, the only mortgage consultancy firm in the industry that tracks both macro events in the financial markets (that impacts interest rate) as well as interest rate movements per se so that we can give that professional and calculated view to our clients.  You may also like to read our general forecast of rate movement in 2019.  And don’t forget you will get a $150 Refinancing Valuation Fee Offset (for min loan $500,000) when you choose to apply for the same home loan package through MortgageWise.  It’s our way of helping clients to defray some of the costs involved in refinancing.  For more in-depth advice and mortgage strategies as we approach end-cycle, contact us today.

Since 2014, MortgageWise.sg has provided thought leadership in the mortgage planning space in Singapore, taking deep dives into the latest developments in the industry, providing useful mortgage tips, and making sense of rate movements.  We seek to build trust with clients over the longer term instead of doing product-peddling for quick one-time deals.  That’s why we always present “whole-of-market” perspective including home loan packages that some banks do not pay us.  Read our clients’ testimonials.

Compare All Latest Rates 2018

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About Darren Goh

Darren Goh is the Executive Director of MortgageWise.sg, a thought leader in the Singapore mortgage industry, with frequent interviews and quotes by the press - Business Times, Straits Times, Zaobao and EdgeProperty for his views on the latest mortgage trends. He is an avid property investor with careers in banking & real estate before becoming an entrepreneur.
View all posts by Darren Goh

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