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WHEN taking a home loan from a bank, remember this: There is no need to pay more than 2per cent for an HDB flat loan or more than 1.5per cent for a private property loan.
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| TEXT & GRAPHICS: LARRY HAVERKAMP & MAROO |
Are you paying more? If so, you may want to read this article and save some money. I compared home loan rates for eight banks and graded them from A to F. You can probably get even lower rates if you bargain with the bank. To increase your bargaining power, you may want to refinance with a group of friends. Another tactic is to shop around and show banks the lowest rate you find. Then ask them to improve on it. Most banks will go lower. Some told me their quoted rates are 'subject to negotiation' and 'the relationship manager may be able to lower rates further'. Important details: The rates shown are for years 1, 2, 3 and onwards. The HDB rates are for a $100,000 loan and private property for a $200,000 loan. Updates are posted at www.AskDrMoney.com Lock-in periods are one year for pegged rates, two years for variable and three years for fixed-rate loans. Pegged interest rates - tied to Sibor (Singapore interbank offered rate) and SOR - (Swap offer rate) are more transparent than Board rates set by banks. Sibor and SOR are updated daily in The Business Times. Home loan rankings 1) OCBC: Grade A- HDB variable: 1.68, 1.68, 1.68, 3.75 (figures are in percentages and for years 1, 2, 3 and onwards). HDB fixed: 1.99, 1.99, 3.75. Private pegged: 1.4, 1.8 (3-month SOR, now 0.55, + 0.85, 1.25) Pros: Rates are competitive. Cons: No pegged HDB loan. 2) HSBC: Grade B+ HDB variable: 1.9, 2.7, 3.8. HDB and private pegged: 1.8 (3-month Sibor, now 0.7, + 1.1). No lock-in. Pros: The pegged rates are competitive. Cons: Variable rate is on the high side. Bank declined to disclose its HDB fixed rate. 3) UOB: Grade B+ HDB and private variable: 1.48, 1.88, 2.68, 3.75. HDB fixed: 2.6, 2.6, 2.6, 3.75. HDB pegged: 1.4, 1.55, 2.05 (3-month SOR, now 0.55, + 0.85, 1.0, 1.5). Private fixed/pegged: 1.48, 2.3 (3-month SOR + 1.75). Pros: Pegged rates are competitive. Cons: Does not post lowest rates on website. 4) Citibank: Grade B HDB: 2.15, 2.15, 2.2 (3-month Sibor + 1.45, 1.45, 1.5). Private: 1.9, 1.9, 1.95 (3-month Sibor + 1.2, 1.2, 1.25). Pros: Pegged rates with tenures of 1, 3, 6 or 12-months. Cons: Rates are on the high side. 5) DBS: Grade B HDB variable: 3.0 (CPF Board rate + 0.5). HDB fixed/pegged: 1.48, 2.4 (12-month Sibor, now 0.9, + 1.5). Private fixed/pegged: 1.48, 2.2 (3-month Sibor + 1.5). Pros: Competitive first-year rates. Cons: 2-year lock-in and big jump in year 2 rates. Variable HDB rate is high at 3 per cent. 6) Standard Chartered: Grade B- HDB variable: 2.78. HDB fixed/variable: 2.4, 2.4, 2.0 (3-month Sibor + 1.3). HDB pegged: 2.25 (3-month Sibor + 1.55 per cent). No lock-in. Private pegged: 2.0 (3-month Sibor (0.7) + 1.3). No lock-in. Private fixed/pegged: 2.45, 2.45, 2.0 (3-month Sibor + 1.3). Pros: Multiple packages. Cons: Rates are on high side. 7) Hong Leong Finance: Grade B- HDB variable (3-year lock-in): 1.33, 2.13, 2.83, 3.63. HDB fixed: 1.63, 2.63, 3.13, 3.63. Private variable: 1.88, 2.48, 3.08, 3.68. Private fixed: 1.98, 2.68, 3.18, 3.68. Pros: First-year rates competitive. Cons: 3-year variable lock-in with high 3rd year rate. No pegged rates. 8) Maybank: Grade C HDB and private variable: 1.88, 2.68, 3.28, 3.75. HDB and private fixed: 1.6, 2.6, 2.9, 3.75. Pros: First-year rates competitive. Cons: Rates on high side after first year. No pegged rates. 
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