Property Loan Market in Singapore

Do you need any property mortgage loan to assist you to buy a home or invest in property? Whether you are a first-time home buyer, multiple property owner or property investor, borrowing money from banks to finance your purchase will give you a power of leverage on other people’s money.

Mortgage loan has enable an ordinary person to control a large amount of money from his initial small amount of down payment using his property as collateral. Such great innovation in finance has helped enormous people turn their dreams of owning a home into a reality.

However, buying a home is still a very big financial commitment for a long time of period. You should be carefully planned upfront, especially exact answers to the questionnaires of your eligibility and affordability.

Mortgage basics

When comes to mortgage loan, there are some basic but important elements you should get to know: loan amount, interest rate, loan tenure and lock-in period.

  • Loan amount – this is simply the sum of money you borrowed to buy your home based on your eligibility and affordability. It is the principal and can be typically up to 70, 80 or 90% of the property market value.
  • Interest rate – this is how much interest you will have to pay annually to the banker for the property loan. It’s how the banker charges you to use the money you borrowed. Interest rates can be fixed, floating, or hybrid over the period of the loan.
  • Loan tenure – this is the duration over the loan is planned to be repaid. For a mortgage loan, it can be as long as till you are at 65 year old.
  • Lock-in period – this is the time frame in which you are obligated to service your loan with a particular bank and also be the duration in which the bank agrees to hold steady the agreed upon interest rate on the loan irrespective of the market rate. If you terminate your home loan during the lock-in period or pay more than the scheduled amount, you will often be subject to penalties. That is to say, the bank’s objective is to certainly make some profit during the lock-in period.

With loan amount, interest rate, loan tenure in certain, you can work out how much is monthly payment which combines the principal and interest of a loan.

Remember that your home is collateral for the loan, which is also a legal contract you sign to promise that you’ll pay the debt monthly on time. Seriously speaking, if your instalment is paid late, the bank will charge overdue interest, if you fail to pay back the loan, the bank can recall the loan and repossess your property for sale. The bank may make you a bankrupt is the sales proceeds from your property are less than the outstanding loan and interest payable, and you are not able to repay the shortfall.

So mortgage loan is a double-edged sword either benefit or harm you. Work out every detail into your budget. As a good rule of thumb, your monthly mortgage payment should not beyond 35% of your monthly income. Follow the rule cautiously within your means and they will take care of you. The Monetary Authority of Singapore has implemented a package of measures to encourage the financial prudence, avoid over-borrowing. Refer to our property financing page for more details.

Mortgage loan market

Singapore property mortgage can be divided into two major categories: HDB loans and bank loans. HDB loan is a privilege for Singaporean families who buy new HDB flat or from resale market. The HDB loan option allows the home buyers to use their CPF funds to pay partially or fully for the property and let the rest to be covered by HDB loan. HDB also offers a variable concessionary interest rate which is less dynamic compared to the commercial interest rates set by the banks. This gives HDB property buyers more stability and predictability in managing their cash flow.

Bank loan market is competitive, orderly, transparent, and well-regulated by the Association of Banks in Singapore (ABS).  As a small open property market, Singapore’s mortgage rates are largely determined by the existing Singapore Interbank Offer Rate (SIBOR) and Swap Offer Rate (SOR) due to their open and transparent concepts.

SIBOR is the interest rate at which banks and financial institutions in Singapore borrow from each other and generally determined by the demand and supply of funds in the Singapore interbank market. SOR is the lending costs and the expected forward exchange rate between the US dollar and Singapore dollar and generally influenced by external factors such as the USD interest and exchange rates. Although SIBOR and SOR rates are affected by different factors, their trend mostly go to the same direction.

SIBOR and SOR are set by the Association of Banks in Singapore. They are transparent, updated timely and publicly known in the market. As the benchmark rates for property loan, many home loan packages pegged to SIBOR and SOR rates. Usually, such kind of loan packages are based one or three-month SIBOR/SOR rates + spread. One of the advantages of them is that the risks are shared across multiple banks and consumers can benefit from their constructive competitiveness. For a quick overview of how SIBOR and SOR compare to each other, you can use the chart below (credit:

3-month SIBOR and SOR rate 2018 to 2020

For mortgage structure options, you can choose your loan with either fixed rate, floating/variable interest rate package. Each of them has its own pros and cons. Here we briefly compare fixed-rate home loan with floating-rate ones.

Fixed-Rate Housing Loan: packages offering a fixed interest rate and guaranteed in the first few years regardless prevailing interest rates rise or fall. The monthly instalment is fixed as well and it allows you to make an easy and certain monthly budgeting. After the fixed-rate period, the interest rate becomes variable and work as a floating rate. The disadvantage is that you would have to pay a relatively high rate if interest rates were to fall during the fixed interest period.

Floating/Variable Rate Housing Loan: The interest rate is floating and varied by the bank throughout the tenure of the loan. Banker will give you one-month notice before change the interest rate on your property loan. The variable rate is usually pegged with its own reference rate or some public financial market indicator like Singapore Interbank Offered Rate (SIBOR) or Singapore Swap Offer Rate (SOR) fixed by the Association of Banks in Singapore.You can benefit from a lower promotional variable rate for the first few years to save you interest with discount or a lower premium.

Mortgage loan services from local banks

All the established banks in Singapore offer a variety of mortgage services for property buyers.  Here are some of the most mentioned ones among the consumers.

DBS bank: it’s Singapore’s biggest bank and among Singapore’s largest housing loan providers to offer a versatile range of home loan packages from fixed rates; to floating rates; to CPF Ordinary Account (OA) rates; to a customized combination.  DBS’s loan packages include DBS HDB Loan, Home Loan 2+2, Mortgage Rate Protector, Mortgage Advantage, bridging loan, DBS Assetline and commercial property loan. For more information, you can visit DBS home loans page here.

UOB bank: it’s one of the largest banks in Singapore and a leading property loan provider. UOB has a long production line for mortgage loans including Private Home Loan, Home Construction Loan, HDB Home Loan, Commercial Property Loan and International Home Loan. For details, you can click her to visit UOB loans page.

OCBC bank: it is a leading Singapore bank for personal and business loans. OCBC offers three different packages for home loans: short term fixed rates, variable rates, and SIBOR based rates to suit your needs. You can click here to find more information about OCBC property loans.

HSBC bank: it is a UK-based multinational bank and has run banking business in Singapore for long time. HSBC offers SIBOR-pegged loan, SmartMortgage loan, variable rate loan and fix rate loan. For example, SmartMortgage links your home loan account with a current account, reducing interest on your home loan by offsetting interest earned on your current account. Detailed information can be found by click here – HSBC property loans.

Citibank: it is a USA-based international banking giant. Citibank offers a wide range of home loan packages whether you are buying your first home, investing in property, or refinancing your loan. Borrowers have the flexibility to switch between interest rate packages and have access to an overdraft line. Housing loans can also be tied to Citibank Checking Accounts, to save on interest repayments. You can click and read more about Citibank home loans here.

Standard Chartered: it is a UK based bank. Standard Chartered offers fast in-principal approval, and loan packages have flexible repayment schemes. You can choose to increase your monthly repayments every year, allowing you to save on interest as your income grows.   The featured mortgage packages are HDB Home Suite, HDB bridging loan and MortgageOne SIBOR. Find more about Standard Chartered home loans.

ANZ: ANZ is an Australia-based bank. ANZ Singapore is the first of its kind in the Singapore market to offer clients an interest rate that is pegged to a combined average of the Singapore Interbank Offered Rate (SIBOR) and the Swap Offer Rate (SOR). It provides a Suite of Property Loan Options in Singapore from Residential Property Loan (fixed rates and floating rates), to the equity loan, to bridging loan. Find more content about ANZ home loans here.

property loan market banks and finance company

Local finance company for home loan services

For home buyers who have difficulty in applying home loan from local banks,local finance company should be your alternatives.If potential home buyers suffer inferior credit record, they can go to those government licensed finance company  for help. Personalize loan solution should be still applicable as long as home loan application is subject to compliance of regulatory requirement. Hong Leong Finance and Singapura Finance are two popular finance companies which provides personal loan services for home loan applicants.

Independent mortgage advisors – property loan market online

The Singapore property loan market has seen the rise of online mortgage advisor platforms during the past several years. Those online portals have successfully combined the advanced web technology with massive up-to-date loan information offered by local major banking players.

property loan market mortgage advisors

By subscription to those platforms, you can use its services freely to easily search, compare and enquire about the best home loans, mortgages and other types of loans available in Singapore. Here are two most popular online loan comparison platforms.

  • Money Smart: launched in 2009, Money Smart started life as a mortgage comparison company operating under the brand They expanded beyond mortgages to help consumers maximize their financial decisions by putting the power in their hands to compare loans, insurance, and credit cards. today MoneySmart Group is one of the largest financial portal in the Southeast Asia region, helping over 100 million people across in Singapore, Hong Kong, Taiwan and the Philippines make smarter financial decisions.
  • Mortgage Supermart Singapore: Money Supermart is one of Singpore’s leading independent finance broker established since 2010 which has broked over $7 billion worth of mortgages & loans.The online platform provides independent loan brokerage advisory for residential home loans, commercial & industrial property loans, oversea property loans, small business loan, and alternative mortgage lending options.
  • setup back in 2009, is powerful online portal for consumers to compare mortgage packages and choose most competitive rates across all major banks and financial institutions. The company is good at financing and refinancing of HDB, private properties and commercial properties – and ensure that you will have a peace of mind in getting the best deal with minimal hassle.
  • Redbrick Mortgage Advisory: an independent mortgage advisory provides unbiased advice from your home loan selection, home protection to handling the whole application process. As experts in financing solutions, the company team seek mortgage options for both residential and commercial properties from 16 banks and financial institutions in Singapore (i.e ANZ, DBS, OCBC, HSBC, UOB, SCB, RHB, Maybank, Bank of China, CIMB, National Australia Bank, Singapura Finance, Sing Investments & Finance, Hong Leong Finance, Westpac, etc).
  • started in 2014 and quickly built up customer goodwill and reputation as a thought leader in the mortgage partner in a few short years. The mortgage advisor team help consumers review all home loan packages and expert advice on mortgage structuring, and work out the most suitable option for the potential home buyers.
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