Which home loan packages should you consider for the best value?

By EdgeProp Singapore / EdgeProp | January 23, 2018 9:00 AM SGT
What goes down must come back up. Unfortunately, this seems to be the current state of our mortgage rates. Since the beginning of the year, banks have raised interest rates for both fixed and floating home loan packages by 10 to 30 basis points.
DBS and UOB are now charging an interest rate of 1.95 percent and 2.05 percent a year respectively for each of the three years of their 3-year fixed rate packages. Both banks were charging 1.85 percent for the same package respectively in end-November and 1.68 per cent respectively in September.
Meanwhile, OCBC raised its 2-year fixed rate package from 1.75 percent to 1.85 percent per annum for each of the two years. The rate from the third-year is 1.90 percent.
Obviously, this is bad news for buyers, who now have to fork out more for a home, especially if they’re looking to purchase private properties.
But it’s not all doom and gloom. Rising interest rates may yet curb the property market recovery, as there are other positive drivers such as a strong economy, a healthy job market and good wage growth.
Also, for aspiring homebuyers, knowing the difference between fixed and floating rate packages can make a difference spanning thousands of dollars every year.
In general, someone with a lower appetite for risk should go with a fixed rate package as loan repayments will be consistent and predictable regardless of market conditions. However, fixed rate interest also tends to be higher.
On the other hand, while floating rate mortgages tend to come with a lower interest rate, they are more volatile and are usually based on the movement of (Singapore Interbank Offered Rate) SIBOR on a monthly or three-month period. This means your interest rates and mortgage repayments will change every one to three months.
Don’t know where to start to find the best rates? Check out our 2018 top picks of the latest home loan packages in the market for private properties.
Best fixed-rates home loans as of January 2018:
Loan Packages
Year 1
Year 2
Year 3
HSBC
1.65%
1.65%
2.05%(SIBOR + 0.75%)
Bank of China
1.65%
1.65%
2.16%(SIBOR + 0.7%)
Citi
1.65%
1.65%
2.35%(SIBOR + 1.05%)
Maybank
1.70%
1.75%
1.85%(BOARD - 2.15%)
OCBC
1.75%
1.75%
1.80%(BOARD + 0.8%)
UOB2 years fixed package
1.75%
1.75%
1.85%(FDR + 1.60%)
DBS
1.75%
1.75%
1.95%(BOARD + 1.75%)