Singapore’s Cheapest Home Loan
Is this really the cheapest home loan you can find in Singapore? Let’s get down to the details.
One – this is a hybrid type of loan where it’s a type of fixed rate linked to DBS 18 month deposit rate. Right now, the Dbs 18 month fixed deposit rates FDR18 are 0.6%.
Truth – Your mortgage rate is only 1% for the first year where FDR18 + 0.4%. The second years rate is FDR18 + 1.2% making it total of 1.8%.
The above rates hold when the FDR stays constant at 0.6%. Should DBS bank decide to increase their fixed deposit rates, your home rates will increase correspondingly.
Advantages – massive savings in interest payment in the first year. If we compare it against a 2% fixed rate loan, you are looking at a whopping savings which comes close to 2 months of instalment payment.
Cons – what we dislike is the 2 year lock in period when we don’t enjoy significant savings. The projected 2nd year loan rate seems fair and reasonable at this time. Potential Borrowers should note that this is NOT a fixed rate loan and DBS has the full discretion to raise the FDR18 rates whenever they have a business need.
If you are looking to get your hand of some great mortgage saving, check out the DBS home loan at http://www.dbs.com.sg/personal/promotion/homeloan-national-day?pid=sg-dbs-pweb-borrowpromo-heroblock-loans-homeloan-national-day-btnlearnmore.
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