Compare Home Loans & Mortgage Interest Rates in Singapore 2018
Searching for the best housing loan in Singapore? Compare interest rates to get the best home loan for your HDB or private property.
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Online Comparison + Expert Advice =
A Great Home Loan Deal
At MoneySmart, we offer more than just online home loan comparison. Our friendly and knowledgeable Mortgage Specialists will help you through the home loan process so you can be confident that you’re getting the best deal possible.
What Are The Benefits Getting Your Home Loan Through Us?
Help in “Plain Simple English”
We know that understanding your home loan can be tough. It’s laden with complicated terms & jargon like TDSR, MSR, SIBOR, SOR, etc. Don’t get a headache trying to figure it out by yourself.
Our Mortgage Specialists will help you understand everything you need to know in simple, easy-to-understand terms.
More Choice = Better Deals
If you’re trying to get your home loan on your own or through your real estate agent, good luck – there’s a higher than 95% chance you’re not getting the best deal.
Our Mortgage Specialists give you access to over 200 home loans from all 12 of Singapore’s top banks.
We Do All the Legwork
The entire home loan process is tedious. You’ve got to deal with tons of paperwork, negotiation with bankers, and lots of running around.
Our Mortgage Specialists will help you compare loan options, assist with loan paperwork, and negotiate with the bankers until your home loan is settled.
Best of All, Our Home Loan Service Is Free!
We’re not kidding, there is no catch. You don’t have to pay a cent because the banks pay us a commission once the mortgage is settled.
Your home loan deal is never affected by the commission we receive from the banks.
Banks do a lot of business with mortgage brokers like us. So it’s in their best interest to work closely with us so we can offer the most competitive deals to our clients.
Start Your Search of Over 200 Home Loans Now. It’s Easy!
Before You Apply for a Home Loan
So you found your dream home and are excited to sign on the dotted line. But before shelling out for a downpayment on that property that caught your eye, there are a few bases you need to cover.
Step 1: Know Your TDSR
Under the latest Government regulations in Singapore, your Total Debt Servicing Ratio (TDSR) cannot exceed 60% of your income. That means that if you have any existing loans, such as a car loan or personal loan, you might be putting yourself over the 60% limit.
Step 2: Approval In Principle
Before you make the purchase, take some time to obtain Approval in Principle (AIP) from your bank of choice. The application procedure is rather tedious and involves quite a bit of paperwork, but it is necessary for the bank to review your credit history and financial health before approving the loan in principle. Once you have AIP, you have 1 to 3 months to purchase your home with more certainty that approval has been granted by a bank.
Step 3: Shop Around
You are not obligated to go with a bank just because it has pre-approved your loan. It is smart to seek pre-approval from multiple banks so you have options. The amount you can borrow will typically be the same across banks.
Fixed Rate vs. Floating Rate Home Loans
One of the main decisions you’ll make in choosing a home loan whether to go for a fixed or floating interest rate. But there is no straightforward answer on which one is better. It depends on your appetite for risk.
Fixed Rate Housing Loans
Fixed rate packages maintain the same interest rate during a lock-in period of 1 to 5 years, regardless of market conditions, after which the interest rate converts into a floating rate. (Note that penalties apply if you choose to refinance during the lock-in period!) Fixed rate housing loans may not be the cheapest, but you can hedge against rising interest rates and also plan your repayment a little better.
Floating Rate Housing Loans
Floating rate packages have interest rates that fluctuate daily, usually pegged to the SIBOR and SOR indices. They can come with or without lock-in periods. If you choose this, your monthly repayment will fluctuate, and you need to be prepared for the risk of rising interest rates. On the other hand, if you can monitor the SIBOR and SOR continuously, you have the option of refinancing if you spot an uptick in rates.
Other Home Loans
Fixed and floating rate loans are not the only kinds on the market. Under the broader umbrella of floating rate home loans, banks also offer home loans pegged to their fixed deposit rates (i.e. floating but not likely to rise much) and to internal board rates (i.e. floating but wholly determined by the bank). There are also new loan packages that don’t quite fit in either category, such as the OCBC OHR , which is supposedly pegged to long-term SIBOR averages (i.e. floating yet stable).
What If You Can’t Get a Home Loan?
If you are denied AIP, it is usually due either bad credit history or your debt obligations being too high, so banks are not confident that you can repay the housing loan. Here is what you can do.
Bad Credit History
If appealing the rejection does not work, you will need to repair your credit history and improve your credit score before you can borrow from a bank. If you’ve filed for bankruptcy in the past, it takes 5 to 7 years before banks will be willing to lend you money again. If you cannot wait, you may want to try legal financial institutions like Singapura Finance instead.
Your TDSR, or portion of income committed to servicing debts, cannot be over 60%. So if you are already saddled with sizeable car loans, personal loans or credit card debts, your AIP request will be rejected. You can work around this by reducing the loan amount, extending your loan tenure or finding a cheaper house.
There is a special case, as many local banks avoid financing Geylang property due to its reputation as a red light district. If you’ve got your heart set on a Geylang home, try foreign banks which might be more amenable to such loans.
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Frequently Asked Questions
How much of my CPF OA can I use for my down payment?
If you qualify for an 80% loan on your new property, you will have to fork out 20% of the purchase price from your own pocket. Of this 20%: 5% of it must be in cash while the remaining 15% can be from cash or CPF OA.
Can I use my CPF OA to pay for monthly installments?
The simple answer is “Yes” you can, however it is important to take note of restrictions on how much you can use. In an example of using CPF to pay for a resale HDB flat, restrictions involving the Valuation Limit and the Withdrawal Limit will apply.
What is the LTV ratio?
A Loan-To-Value ratio describes the ratio between the amount a lender can loan you versus the appraised value of the property.
Are housing loans from local banks better than foreign banks in Singapore?
Local banks like DBS, UOB and OCBC structure their home loans similar to how foreign banks would and there is technically no difference between these banks other than the actual mortgage loans they offer. There is some debate around whether certain banks are more lenient about approving your loan, but there is no objective evidence around this.