Best Home Loans in Singapore 2021 | Singsaver

Home Loans In Singapore (2021): Best Mortgage Rates To Consider

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Don’t go eenie meenie miney mo when choosing which bank loan to take up – we’ve provided you with the best home loans for your property with the lowest interest rates to help you save (or squander) some extra bucks each month.


Every spending situation is unique. SingSaver assembles the ‘Best For‘ list, so you can decide what’s best for you.


Being able to afford the downpayment for your house is one thing, but making monthly mortgage repayments is another ball game altogether – you’ll realise how much extra you’re paying just for the accumulated interest.

When it comes to home loans, treat them as if you’re buying a new pair of shoes – you have to shop around to find the best pair that fits you, while also making sure they’re at the lowest price possible. With so many banks offering different home loans with variable or fixed interest rates and varying lock-in periods, you might be at a loss.

But don’t worry, we’ve got you. Here’s what you need to know about home loans in Singapore:

How to choose the best home loan?

1. Type of home loan

The first thing that you have to consider is whether you want a loan that has a fixed or floating interest rate, which largely depends on your risk appetite. This will be further elaborated on later.

Homebuyers buying a HDB flat have the option of taking up a HDB loan as opposed to a bank loan. Though HDB loans generally have higher interest rates, it is maintained at a fixed rate and requires a 10% down payment, compared to the usual 25% down payment for bank loans.

2. Interest rates

Though you may think interest rates make up a very small proportion of the property price, you’ll be surprised at how much extra you’ll have to fork out when accumulated. This is why shopping around for a loan that has a low interest rate can save you up to thousands of dollars.

Interest rates are always changing due to the volatile market conditions, but they typically range anywhere from 0.80% to 2.50%. Current bank rates are usually between 0.80% and 1.8%, so be sure not to settle for the first bank loan you lay your eyes on.

It’s worth noting that banks usually offer lower spreads (the rate you see after “+”) and hence lower “promotional” rates for the first few years, before increasing it back to a higher rate thereafter.

3. Lock-in period

With most bank loans, you’ll realise that they always have a lock-in period, usually between zero to five years. This lock-in period is the period of time where you’ll be charged a penalty (usually 2% to 5% of your outstanding loan amount) if you decide to make prepayments or cancel your home loan.

This is the bank’s way to cover it’s base as banks typically offer promotional rates in the first few years with a lower interest rate, incentivising buyers to be “locked in”.

This is why if you’re purchasing a home that is still under construction, also known as Building Under Construction (BUC), it is recommended that you take up a bank loan with no lock-in period, so you can decide to refinance any time when your home is completed.

Fixed home loan rates vs floating home loan rates

Fixed interest rates 

Fixed interest rates are quite self-explanatory, meaning that the interest rate will be maintained during the entire period of the mortgage agreement. This gives you stability and consistency, making it handy when you plan out your finances every month, since the monthly mortgage repayments are always static at a specific amount. Fixed interest rates are great for those who have a low risk appetite, since the interest rates will not increase due to market fluctuations, though fixed interest rates are usually higher than floating rates.

Since these rates are fixed, they are not pegged to market or board rates during the lock-in period. However, once the period is over, the prices will be pegged, which serves as a good indicator for you to refinance.

Floating interest rates 

On the other hand, floating or variable interest rates are subjected to the volatile market fluctuations, and are pegged to Singapore Interbank Offer Rate (SIBOR), Singapore Overnight Rate Average (SORA), Board Rate or Fixed Deposit Home Rate (FHR) that changes according to the index. They are more preferable for those who have a higher risk appetite. Dips in the market interest rates can translate into more savings for the month, while any increase will have you paying higher amounts.

Despite this, do note that most banks will usually inform you 30 days in advance when interest rates change, giving you the option to refinance, which is a full repayment of your existing home loan or moving your loan to another competitor lender because of their lower interest rates.

When it comes to SIBOR rates, banks usually offer either 1M SIBOR (1-month SIBOR) or 3M SIBOR (3-months SIBOR), which essentially means that the rates are revised every one or three months, depending on the loan package you choose. If you’re looking for a less volatile package, go for the 3M SIBOR as rates only change every three months, making it less volatile and less risky.


Fixed interest ratesFloating interest rates
Risk appetiteLowHigh
VolatilityFixed rates, not volatileSubjected to market fluctuations, very volatile
Interest ratesHigher interest ratesLower interest rates, but spread applies after promotional rate
Pegged to market?No, only after lock-in periodYes – FHR, board rates, SIBOR or SORA

Best home loans for HDB flats

If you’re buying a HDB flat, you have the option of opting for a HDB loan or a bank loan. While HDB loans are fixed at a specific rate (2.6% currently), and only require a down payment of 10% of your flat’s purchase price, the interest rate is a lot higher than what banks offer. HDB loans also allow you to borrow up to 90% of the purchase price while banks only loan you up to 75%.

On the other hand, opting for a bank loan will grant you a much lower interest rate, be it fixed or floating rates. We’ve scoured the internet for the best rates for you – both fixed and floating to meet your every need. The rates below are based on a bank loan of S$500,000 and a tenure of 25 years.

Best fixed home loans for HDB flats

Here are the best loans with fixed interest rates:

BankFirst year Interest rateLock-in periodSign up promotion
Citibank1.23% p.a.2 yearsReceive S$560 worth of shopping vouchers when you take up a loan of at least S$800,000
Citibank 1.25% p.a.3 yearsReceive S$560 worth of shopping vouchers when you take up a loan of at least S$800,000
DBS1.30% p.a.2 yearsOne free conversion after 24 months from the date of 1st disbursement
DBS

1.40% p.a.3 yearsOne free conversion after 24 months from the date of 1st disbursement
HSBC1.80% p.a.2 yearsN/A
Maybank1.84% p.a.2 yearsN/A
OCBC1.38% p.a.2, 3, 4 yearsN/A
Standard Chartered1.86% p.a.2 yearsN/A
UOB
1.86% p.a.3 yearsGet a reward upon home loan acceptance when you apply online

Which bank’s fixed home loan is best?

When it comes to the interest rate for the first year, Citibank’s fixed home loan takes the crown with the lowest rate at 1.23% p.a. It also has a lock-in period of just two years, making it easy for you to refinance after the lock-in period if you want to do so.

Though many banks offer higher interest rates with a higher lock-in period, OCBC’s fixed home loan’s interest rate is maintained at 1.38% p.a., while giving you the option to choose from a two-, three- or four-year lock-in period (though the four-year lock-in period is only applicable for HDB homeowners).

Best floating home loans for HDB flats

If you have a higher risk appetite and do not want to pay for the high interest that a HDB loan would entail, then you’d probably want to sign up for a home loan with floating rates. 

Here are the best home loans with the lowest floating interest rates:

BankFirst year Interest rateLock-in periodSign up promotion
Citibank SIBOR
1.10% p.a.2 yearsReceive S$560 worth of shopping vouchers when you take up a loan of at least S$800,000
Citibank SORA
1.11% p.a.2 yearsReceive S$560 worth of shopping vouchers when you take up a loan of at least S$800,000
DBS 3M SORA0.14% + 0.80% p.a.2 yearsN/A
DBS FHR60.20% + 0.80% p.a.(capped at 1.40% p.a. For first year)2 yearsN/A
Maybank 3M SORA0.14% + 0.90% p.a.1 yearN/A
OCBC Eco-Care Home Loan(1M SORA)0.11% + 0.98% p.a.2 yearsN/A
OCBC Mortgage Board Rates1.30% p.a.Not specifiedN/A
OCBC 3M SIBOR0.16% + 0.30% p.a.Not specifiedN/A
Standard Chartered 3M SORA0.14% + 1.20% p.a.2 yearsN/A
UOB 3M SORA0.14% + 1.20% p.a.2 yearsN/A

*SORA and SIBOR rates are as of 22nd July 2021

Which bank’s floating home loan is best?

Interest-wise, your best bet would be to sign up for the OCBC 3M SIBOR, which offers the lowest interest rate at 0.46% p.a..

However, if you’re planning on refinancing your bank loan soon, you might want to go for the Maybank SORA that has a lock-in period of only a year, while still offering a decent rate of 1.04% p.a that is still considerably low.

Do remember to constantly check the SORA and SIBOR rates as they are always changing.

Best home loans for private property

If you’re getting a private property loan, your only option would be to take up a home loan from a bank, as you won’t be able to get a HDB loan. With both fixed and floating rates available for you, it’s best to choose a plan based on your risk appetite, and whether or not you plan to refinance soon after.

Best fixed home loans for private property

Here are the best fixed home loans:

BankFirst year Interest rateLock-in periodSign up promotion
Citibank1.23% p.a.2 yearsReceive S$560 worth of shopping vouchers when you take up a loan of at least S$800,000
Citibank 1.25% p.a.3 yearsReceive S$560 worth of shopping vouchers when you take up a loan of at least S$800,000
DBS1.30% p.a.2 yearsOne free conversion after 24 months from the date of 1st disbursement
DBS

1.40% p.a.3 yearsOne free conversion after 24 months from the date of 1st disbursement
HSBC1.80% p.a.2 yearsN/A
Maybank1.84% p.a.2 yearsN/A
OCBC1.38% p.a.2, 3, 4 yearsN/A
Standard Chartered1.86% p.a.2 yearsN/A
UOB
1.86% p.a.3 yearsGet a reward upon home loan acceptance when you apply online

Best floating home loans for private property

We’ve compared the best home loans with floating interest rates:

BankFirst year Interest rateLock-in periodSign up promotion
Citibank SIBOR
(receive S$560 worth of shopping vouchers when you take up a loan of at least S$800,000)
1.10% p.a.2 yearsReceive S$560 worth of shopping vouchers when you take up a loan of at least S$800,000
Citibank SORA
(receive S$560 worth of shopping vouchers when you take up a loan of at least S$800,000)
1.11% p.a.2 yearsReceive S$560 worth of shopping vouchers when you take up a loan of at least S$800,000
DBS 3M SORA0.14% + 0.80% p.a.2 yearsN/A
DBS FHR60.20% + 0.80% p.a.(capped at 1.40% p.a. For first year)2 yearsN/A
Maybank 3M SORA0.14% + 0.90% p.a.1 yearN/A
OCBC Eco-Care Home Loan(1M SORA)0.11% + 0.98% p.a.2 yearsN/A
OCBC Mortgage Board Rates1.30% p.a.Not specifiedN/A
OCBC 3M SIBOR0.16% + 0.30% p.a.Not specifiedN/A
Standard Chartered 3M SORA0.14% + 1.20% p.a.2 yearsN/A
UOB 3M SORA0.14% + 1.20% p.a.2 yearsN/A

*SORA and SIBOR rates are as of 22nd July 2021

Best home loans for Buildings Under Construction (BUC)

While you may think that getting a loan after your house is completed might be the best way to go, we recommend otherwise – not only does settling your home loan give you a peace of mind, you might also be able to get better interest rates.

Since your home is not yet completed, many homeowners opt for home loans with no lock-in period, which gives them the freedom to refinance and get a lower interest rate after their property is complete.

On this basis, we’ve compiled a list of bank loans with no lock-in period and the lowest interest rates. 

BankFirst year Interest rateLock-in period
Citibank SIBOR1.06% p.a.0 years
Citibank SORA1.23% p.a.0 years
DBS FHR61.80% p.a.0 years
HSBC SIBOR1.02% p.a.0 years
HSBC SORA1.12% p.a. 0 years
OCBC SORA1.10% p.a.0 years
Standard Chartered Board Rate1.10% p.a.0 years
Standard Chartered SORA0.98% p.a.0 years

Which bank’s home loan is best for BUC?

Since the loans that we’ve compiled do not have a lock-in period, the only variable is the interest rate. From the table, Standard Chartered SORA seems to offer the lowest interest rate at 0.98% p.a., where other banks offer an interest rate of 1% p.a. and higher.

However, as the interest rate and spreads are always changing, it is best to check their website before signing up for a loan to get their latest rates.

Will interest rates go up in 2021 Singapore? 

This is the golden question of every homeowner, and basically every Singaporean. According to an article on Bloomberg, Monetary Authority of Singapore Chairman and Senior Minister Tharman Shanmugaratnam said, “The risk of rising interest rates is a reminder that everyone should continue to exercise caution in their property purchase decisions,” as the interest rates in Singapore are expected to rise in tandem with those in the US.

He added that “buyers should assume that interest rates will rise, and be sure of their ability to service their loans before making long-term financial commitments.” The Business Times also reported that Singapore’s economy is expected to grow by 4% to 6% in 2021.

If these predictions are right, then maybe it’s time to secure your home loans soon, before the interest rates continue to rise.

Read these next:
The When And How Of Refinancing Your Home Loan
Fixed vs Floating Home Loan Rates: Which One Is Suitable For You?
Home Insurance Promotions And Discounts To Protect Your Home
How Much Can You Borrow For Your Home Loan?
Million Dollar HDB Home: What’s The Hype All About?


By Deborah Gan
A mahjong addict with an undying love for dogs, Deborah is always on the hunt for cheap deals because she is always broke. That is why she is attempting to be more financially savvy to be.. less broke.