What are home loans?
A home loan is money borrowed from the Housing Development Board (HDB) or bank to help finance the purchase of your property.
If you are purchasing a HDB flat, you may be eligible for a housing loan at a concessionary interest rate. However, this is subjected to HDB’s criteria and approval.
Once you have received approval for a home loan, do bear in mind the following:
- Your property will be used as collateral for the loan. This means that if you are unable to pay your loan, the lender (depending on whether it is HDB or the bank) has the right to take back your property
- The loan amount granted to you is based on eligibility
- The loan is disbursed immediately after the downpayment on the property is made, essentially when you pay the remaining purchase price of the property to the seller
- Loan interest is charged from the first disbursement
Who is eligible for a home loan?
Getting a home loan is not as straightforward as it seems. HDB and the respective banks each have their own set of eligibility criteria for those who wish to take a home loan with them.
Some of the eligibility criteria includes:
- Meeting a minimum monthly income
- The home buyer’s minimum and maximum age
- Loan tenure
- Residency status of the home buyer, whether you are Singapore, Permanent Resident or expatriate
If you do not have a steady stream of income or are self-employed, HDB and banks will require you to demonstrate the ability to pay the monthly instalments in order to be eligible for a loan. However, this is again subjected to the respective lender’s assessment and approval.
What are the types of home loans available?
Depending on the property that you are buying, your home financing options may differ.
HDB Loans
If you are purchasing a HDB, you will have the option of applying for a HDB loan. This is in addition to the option of getting a bank loan. However, one of the key criteria is that at least one of the buyers has to be a Singaporean.
Besides the residency criteria, you will also need to meet the maximum household income and not own any private or commercial properties.
The interest rate on the HDB loan is typically pegged at 0.1% above the CPF Ordinary Account (OA) interest rate. This interest rate will be revised from time to time to ensure alignment with any revisions of the CPF interest rates.
Bank Loans
If you are purchasing a private property, financing this purchase can only be done with a bank loan. A HDB loan will not be applicable for private properties.
Bank home loans typically have a wide array of loan packages at different interest rates. This provides you with the opportunity to borrow at a lower interest rate as compared to taking a HDB loan. This could potentially add up to a substantial amount if your loan amount spread out over a long period of time. However, the trade-off of taking a bank loan is that you will have to constantly monitor the interest rate as they tend to fluctuate depending on market conditions.
Understanding the terms of a home loan
HDB loans are fairly straightforward, whereby the interest is always fixed at 0.1% higher than the CPF (OA) interest rate.
Bank loans, on the other hand, typically have two types of loan options: Fixed-rate home loan and floating or variable rates home loan.
Fixed-rate
As its name suggests, a fixed interest rate home loan allows you to lock in a fixed interest rate for a certain number of years, typically between two to five years depending on your selected loan tenure. This ensures that your monthly loan repayment instalments will remain the same until the end of your loan tenure or if the lender decides to change the interest rate under certain circumstances.
A fixed-rate home loan is ideal for those who need to budget their finances for monthly instalments as the interest rates are fixed for that specific period of time. However, once your fixed rate loan tenure ends, your home loan package will automatically change to a floating rate.
Floating or variable rates
In Singapore, there are three different types of floating rates – Singapore Interbank Offered Rate (SIBOR), Board Rate (a rate that is determined by the bank) and the bank’s fixed deposit rate. These interest rates are variable and can move up or down at any time depending on the prevailing market conditions. This means that if any of these reference rates were to go up, the corresponding interest payable on your home loan will likely increase in tandem.
It is mandatory for banks to inform you in advance, typically 30 days prior, before they make any changes to the interest rate on your housing loan.
How to apply for a home loan?
Know your eligibility
Before applying for a home loan, the first step is to understand which type of loan you are eligible for.
The next step is to then determine how much you can borrow. If you are taking out a home loan with a bank, the loan amount is typically determined by your Total Debt Servicing Ratio (TDSR) or Mortgage Servicing Ratio (MSR).
If you are taking out a HDB loan, you will have to apply for a HDB Loan Eligibility (HLE) letter. This will provide you with details on the amount you can borrow, the projected monthly repayments as well as the total amount of cash that you require.
Obtain your In-Principal Approval (IPA)
Suppose you have decided to proceed with a bank loan, the next step is to get an IPA of your housing loan. This essentially is a document from the bank which should indicate the loan amount that they are willing to lend you. Your TSDR, MSR, annual income and credit score would have already been taken into account when computing the loan amount.
Apply for home loan
Once you have obtained your IPA, the final step is to go ahead and apply your home loan with your chosen financial institution!
Where to get a home loan in Singapore?
Here are some financial institutions in Singapore that offer home loan packages:
Home Loan Provider |
DBS Bank |
Speciality |
|
Pricing |
Contact bank for loan amount & interest rates |
Website |
https://www.dbs.com.sg/personal/loans/home-loans/default.page |
Address |
View branch locations here |
Telephone |
1800 111 1111 |
Operating Hours |
View branch opening hours here |
Home Loan Provider |
OCBC Bank |
Speciality |
|
Pricing |
Contact bank for loan amount & interest rates |
Website |
|
Address |
View branch locations here |
Telephone |
65 6363 3333 |
Operating Hours |
View branch opening hours here |
Home Loan Provider |
Maybank Singapore |
Speciality |
|
Pricing |
Contact bank for loan amount & interest rates |
Website |
https://www.maybank2u.com.sg/en/personal/loans/property-loans/index.page |
Address |
View branch locations here |
Telephone |
View contact details here |
Operating Hours |
View branch opening hours here |
Home Loan Provider |
CIMB Bank |
Speciality |
|
Pricing |
Contact bank for loan amount & interest rates |
Website |
https://www.cimb.com.sg/en/personal/banking-with-us/loans-financing/property-loan/cimb-hdb-home-loan.html |
Address |
View branch locations here |
Telephone |
View contact details here |
Operating Hours |
View branch opening hours here |
Home Loan Provider |
POSB Bank |
Speciality |
|
Pricing |
Contact bank for loan amount & interest rates |
Website |
https://www.posb.com.sg/personal/loans/home-loans/default.page |
Address |
View branch locations here |
Telephone |
1800 339 6666 |
Operating Hours |
View branch operating hours here |
Home Loan Provider |
Standard Charted Bank |
Speciality |
|
Pricing |
Contact company for loan amount & interest rates |
Website |
https://www.sc.com/sg/borrow/ |
Address | View branch locations here |
Contact |
View branch contact details here |
Operating Hours |
View branch operating hours here |
Home Loan Provider |
State Bank of India |
Speciality |
|
Pricing |
Contact bank for loan amount & interest rates |
Website |
https://www.sbising.com/home-loans |
Address |
View branch locations here |
Contact |
1800-724 7464 / 65 6228 1116 |
Operating Hours |
Monday to Friday: 09:30 AM – 05:45 PM |
Home Loan Provider |
UOB Bank |
Speciality |
|
Pricing |
Contact bank for loan amount & interest rates |
Website |
https://www.uob.com.sg/personal/borrow/property/mortgage-options/hdb-home-loan.page |
Address |
View branch locations here |
Telephone |
View contact details here |
Operating Hours |
View branch operating hours here |
Home Loan Provider |
Bank of China |
Speciality |
|
Pricing |
Contact bank for loan amount & interest rates |
Website |
https://www.bankofchina.com/sg/pbservice/pb2/201001/t20100120_955824.html |
Address |
View branch locations here |
Contact |
1800 669 5566 |
Operating Hours |
View branch operating hours here |
Home Loan Provider |
Citibank |
Speciality |
|
Pricing |
Contact bank for loan amount & interest rates |
Website |
https://www.citibank.com.sg/gcb/loans/home-loan/home-loan.htm |
Address |
View branch locations here |
Telephone |
View branch contact details here |
Operating Hours |
View branch operating hours here |
Home Loan Provider |
HSBC Bank |
Speciality |
|
Pricing |
Contact bank for loan amount & interest rates |
Website |
https://www.hsbc.com.sg/loans/products/home/ |
Address | View branch locations here |
Telephone |
View contact details here |
Operating Hours |
View branch opening hours here |
Home Loan Provider |
Hong Leong Finance |
Speciality |
|
Pricing | Contact bank for loan amount & interest rates |
Website |
https://www.hlf.com.sg/personal/loans/hdb-home-loan.html |
Address | View branch locations here |
Telephone |
65 6579 6777 |
Operating Hours |
Mon – Fri: 9am – 4.30pm Sat: 9am – 12nn |
Home Loan Provider |
Bank of East Asia |
Speciality |
|
Pricing | Contact bank for loan amount & interest rates |
Website |
https://www.hkbea.com.sg/html/en/beasg-personal-banking-loan.html |
Address | BEA Building, 60 Robinson Road, Singapore 068892 |
|
[email protected] |
Operating Hours |
Monday – Friday (9:00 am – 3:30 pm) |
Home Loan Provider |
RHB Singapore |
Speciality |
|
Pricing | Contact bank for loan amount & interest rates |
Website |
https://rhbgroup.com.sg/personal/loans/home-and-property |
Address | View branch locations here |
Telephone |
View contact details here |
Operating Hours |
Monday – Friday: 9am to 4pm Saturday: 9am to 12pm Sunday & Public Holiday: Closed |
Home Loan Provider |
Singapura Finance |
Speciality |
|
Pricing | Contact bank for loan amount & interest rates |
Website |
https://www.singapurafinance.com.sg/mortgage_loan.php |
Address | View branch locations here |
Telephone |
65 6880 0688 |
Operating Hours |
Mon to Fri: 0900h-1630h Sat: 0900h-1200h |
Home Loan Provider |
Sing Investments & Finance Limited |
Speciality |
|
Pricing | Contact bank for loan amount & interest rates |
Website |
https://www.sif.com.sg/housing-loan/ |
Address | View branch locations here |
Contact |
65 6438 7060 |
Operating Hours |
Mon – Fri: 9am – 4pm |
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