The Best Home Loan Packages of 2015


To say that 2015 was an eventful year is to give the word “understatement” a whole new definition. Congratulations to those who made it this far unscathed by traumatic worldly events.

On the home front, aspiring homeowners probably experienced relief and anguish as property prices dipped while borrowing costs increased. The days of cheap mortgages are soon to be over, we were told. And so to warm your cold, cold heart, here are some of the best loan packages of 2015, for those are spending their year-end bonuses on property, and for those who want to refinance before the clock strikes 2016.


Best Floating Rate Packages

SIBOR-pegged loans

SIBOR –pegged loans have been the common option in the Singapore property mortgage landscape as SIBOR rates have been at lying around the 0.4% level for the past few years.   As all banks add a fixed spread to the one, three, or 12-month SIBOR rate, and many offer attractively low rates on the first two to three years, before slapping higher rate on the subsequent years.

Hence, if you really don’t ever so often, then make sure you take into account the post-honeymoon rates.  In addition, don’t forget to take note of the other conditions, such as lock-in periods and penalties, which can possibly sour a good deal.

Bank of China 3M SIBOR Rate Package

First 3 years Rate: 3 Month SIBOR + 0.75%

Thereafter: 3 Month SIBOR + 0.75%

Lock-in period: None

Refinancing legal subsidy: None

What’s attractive about Bank Of China’s package is that its rather attractive fixed spread of 0.75% is applicable for, well, forever.  While there is no lock-in period, there is also no penalty for those who choose to make partial or full repayment of the loan in the first three years. However, for most people, this should hardly pose as a significant deal-breaker.

Citibank 1month SIBOR Rate Package

First 3 years Rate: 1 Month SIBOR + 0.85%

Thereafter: 1 Month SIBOR + 1.25%

Lock-in period: 2 years

Refinancing legal subsidy: Yes, with 3 year clawback

Citibank offers the flexibility of changing the SIBOR peg at any time, with options of 1, 3, 6 and 12-month SIBOR. If you keep yourself updated with the movements of the SIBOR, you can use this feature well to your advantage.

If SIBOR rates are expected to increase, you can make the switch from 1-month to 3-month and even 12-month SIBOR.  This is because with rising rates, the longer period SIBOR (e.g. 12-month) will increase slower and hence, provide you some cushion. As the experts said, it’s not on the curve.

As the converse is true, should SIBOR ever see a dive again, you can make the switch to 1-month so that lower interest rates are reflected quicker, saving you some on your monthly repayment.

Fixed Deposit Rate Loans

Fixed Deposit Rate Loans are what you should really be paying attention to. There are currently only two players in this relatively new market- DBS and OCBC, and both offer equally attractive packages.

With SIBOR rates increasing, we’d expect more people to switch over to the Fixed Deposit Rate peg, which is less volatile.  Find out more about how FDR home loans work here.


In general, the 36-month Fixed Deposit Rate would be higher than the 18-month rate as banks want to encourage customers to deposit funds for a longer period of time.

However, the OCBC loan package has a lower spread on year four onwards, and may turn out to be the better deal in the long run if the difference between the 18-month and 36-month Fixed Deposit Rates remains marginal. The current difference stands at 0.05%


Best Fixed Rate Packages

Fixed rate packages are ideal for those who want predictability and some level of security, which could come in useful for budgeting and financial planning.  Interest rates are fixed for a period of time, between two to five years, before switching back to variable rates.

OCBC forecasts the 3-month SIBOR rates to hit over 2% by the end of next year, making fixed rate home loans a lot more attractive than they were in the past years.

UOB 2-year Fixed Rate Home Loan

First 2 years Rate: 1.88%

Year 3: 2.28% (variable)

Thereafter: 2.65% (variable)

Lock-in period: 2 years

Refinancing legal subsidy: Yes, with 3 year clawback

The UOB 2-year Fixed Rate home loan is a good option for the first two years.  After which, the rates are then pegged to Board Rates.  This package is ideal for those who want a peace of mind for two years, and do not mind having to review and refinance subsequently.

Bank of China 3-year Fixed Rate Home Loan

First 3 years Rate: 1.98%

Thereafter 3 Month SIBOR + 1.25%

Lock-in period: 3 years

Refinancing legal subsidy: Yes, with 3 year clawback

Bank of China’s 3-year fixed rate package is highly attractive, given the assumption that the SIBOR will most definitely rise.  Comparing this to Bank of China’s SIBOR-pegged package (3-month SIBOR + 0.75%), you will get to enjoy comparative savings as soon as the 3-month SIBOR increases above 1.23% (currently 1.13%), anytime in the next three years, which seems to be the likely case. A 0.1% increase in 3-month SIBOR is not entirely imaginative given the 300% jump in 2015 alone.

If you are about to purchase your property or refinance, it’s indeed apparent that these selected fixed rate packages or the two Fixed-Deposit Rate loans are your best bet to ensure that your monthly mortgage payment doesn’t cause any more heartache than it already does.

And when in doubt, speak to our mortgage consultant to get clear and professional advice. Our experienced consultants will help you navigate the TDSR framework and banks guidelines to match the lowest loan to your requirements.


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